The process for Bitcoin‘s (BTC) anticipated halving has started, and well-known crypto expert Willy Woo has made an audacious projection. In a recent tweet, Woo emphasized the potential influence of this occurrence on Bitcoin‘s price, stating that it may cause a significant surge, possibly resulting in a dramatic price increase for Bitcoin once the event transpires.
Bitcoin’s self-regulating mechanism, called halving, kicks in approximately every four years or after 210,000 blocks are mined. In this process, the compensation given to miners for validating transactions and appending them to the blockchain is reduced by half. This adjustment aims to manage inflation and preserve a capped Bitcoin supply of 21 million coins.
Major drop in annual supply growth
Based on Woo’s assessment, the approaching Bitcoin halving is expected to cause a significant decrease in the cryptocurrency’s annual increase in supply. At present, this increase is at a rate of 1.7%. Following the halving, though, the supply growth will decrease to only 0.85%. For comparison, Woo highlighted that gold’s annual supply expansion is 1.6%, implying that Bitcoin’s supply growth will soon be less than gold’s.
In around ten days, an event called the halvening will occur for Bitcoin, leading to a significant decrease in its annual supply growth from approximately 1.7% to 0.85%. This rate is less than gold’s annual supply increase of 1.6%, which doubles every 44 years. Currently, the US dollar experiences a negative supply growth rate of around 1.7% as it battles inflation. A return to normal supply growth levels of 5-10% for the dollar could result in an explosive price surge for Bitcoin.
— Willy Woo (@woonomic) April 9, 2024
Woo pointed out the contrasting supply expansion rates between Bitcoin and the US dollar. The value of the US dollar is currently shrinking at a rate of -1.7% annually due to inflation. Typically, the annual growth rate for fiat currency supplies ranges from 5% to 10%. Once the US dollar’s supply growth returns to these normal levels, Woo anticipates that Bitcoin’s price will surge significantly.
Market implications
The Bitcoin halving is seen by many as a positive sign for the cryptocurrency, as it decreases the speed at which new Bitcoins enter the market. This decrease in supply can lead to higher demand and a potential increase in prices. Woo’s forecast of Bitcoin experiencing significant price growth after the halving reflects the increasing enthusiasm among investors about the coin’s future value trend.
Several analysts and experts, including Woo, hold a positive outlook for Bitcoin after the halving event. They argue that the decrease in new supply, coupled with expanding usage and institutional investment, may drive Bitcoin’s price to new peak levels within the near future.
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2024-04-09 16:53