During unprecedented financial times, talk of Bitcoin seems to always come about. Touted as being a decentralized currency with no political ties, Bitcoin is often seen as a hedge to inflation.
One event that investors are looking forward to in the world of crypto is the "Bitcoin Halving" event scheduled for May 11. What this entails is that bitcoin miners will be awarded 6.25 bitcoin per block mined as opposed to the 12.5 bitcoin reward. This is done to slow down supply and control inflation. Around every 4 years, this halving process happens and tends to result in a spike of bitcoin price shortly after.
According to the research group Pantera Capital, there's typically a rally after past halving events which last around 446 days, which means that bitcoin is projected to hit it's peak come August 2021.
Throughout the pandemic, investors have gotten more keen on bitcoin's future. On March 12, bitcoin dropped an astonishing 37% from $7,911 to $4,970, before rallying %96.4 to its current price of around $9760.
Now, not only is the upcoming event helping bitcoin's case but so is the growing belief that bitcoin, especially in a time of crisis such as now, will act as an effective hedge against the inflation predicted to arise from the pandemic.
Investor Paul Jones, founder, and CEO of Tudor Investment Corp. announced on Thursday that his fund would possibly hold a low single-digit percentage of its total assets into bitcoin futures. Jones believes that a jump in inflation, resulting from the printing of money and balance sheet expansions from US central banks, will happen eventually.
Is it time to invest in bitcoin?
Bitcoin can be quite volatile. Although trends in history have shown that after halving events the price for the commodity does increase, it's hard to say until how high and if it'll eventually come down. As more and more paper money is being printed out to keep the economy afloat, worries about inflation arise, and bitcoin can be used to diversify your portfolio.
As of right now, bitcoin looks like a buy that diversifies your holdings and would be a solid choice for any investor worried about the future state of fiat currency.
Any thoughts? Feel free to comment below