[ad_1]
NEW YORK: Bitcoin slipped into volatile trading on Monday (May 11) after it underwent a technical tightening that lowered the rate at which new currencies are created, but prospects remained optimistic as the surge in supply slows down.
Monday’s “halving” reduces the rewards given to those who “mine” bitcoin from 12.5 to 6.25 new coins. The next half will be in 2024.
Bitcoin relies on so-called “mining” computers that validate transaction blocks by competing to solve math puzzles every 10 minutes. In return, the first to solve the puzzle and clear the transaction is rewarded with new bitcoins.
In the late afternoon, bitcoin fell 1.3 percent to $ 8,620.43 against the dollar on the Bitstamp platform. He briefly became taller.
“The incentive is now less for miners to mine Bitcoin and they will probably switch to more profitable cryptocurrencies. So in the short term, there will be pressure for Bitcoin,” said Edward Moya, senior market analyst at OANDA in New York.
“But in the long term, you will probably see higher prices. With all the fiscal and monetary stimulus being injected into the global economy, there is renewed interest from institutional traders looking for alternatives to modern government-backed currencies.”
Bitcoin has gained more than 20 percent since the beginning of the year. It touched $ 10,000 last week, a maximum of about three months, after Bloomberg reported that hedge fund manager Paul Tudor Jones has backed bitcoin as hedge against inflation.
Traders said the prospect of Bitcoin’s halving has driven asset gains this year.
Two previous Bitcoin “halves”, one in November 2012 and the other in July 2016, had signaled the start of Bitcoin’s most dramatic bullfights over a period of several years, though not before a brief sell-off.
The two previous bitcoin events boosted concentrations of around 10,000 percent from late 2012 to 2014, and roughly 2,500 percent from mid-2016 to the currency’s all-time high, just below $ 20,000 in December 2017. , according to merchants.
Scott Freeman, co-founder and partner at crypto firm JST Capital, said volatility should decrease from its recent highs now that the “halving” has occurred.
“Given that the halving occurred seamlessly in the crypto markets, we expect to see continued growth in crypto ecosystems, especially with the recent surge in interest from institutional investors and continued buying by retail investors. “he added.
