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Bitcoin has rallied 66% this year after a dismal 2022 - and that may be just the beginning of a bigger advance.
Some cryptocurrency analysts think the token could surge past $50,000 following a routine 'halving' process due next year that would slash supply, according to a report by Bloomberg. The original digital coin is currently trading around $27,400, after briefly topping $30,000 earlier in April. It finished last year near $16,500.
The world's most traded cryptocurrency has soared after each of the last three 'halvings' that have taken place since 2012, according to data from Bloomberg Intelligence and Matrixport. The process could help the coin gain at least 81%, the outlet reported.
Bitcoin 'halving' happens roughly every four years and is due next in April 2024. It's done to eventually cap the token's total supply at 21 million units, and cuts in half the rate at which new coins are released as well as the reward given to miners for their work in processing transactions.
Markus Thielen, head of research and strategy at the digital-asset investment firm Matrixport, predicts that bitcoin will more than double its current price and reach around $65,623 by next April, Bloomberg reported. Bloomberg Intelligence analyst Jamie Douglas Coutts told the outlet he thinks the market has priced in 50% of the expected halving that's expected next year.
"Bitcoin cycles bottom around 12-18 months prior to the halving and this cycle structure looks similar to the past ones, albeit many things have changed — while the network is vastly stronger, bitcoin has never endured a prolonged severe economic contraction," Coutts told the publication.
The coin was trading at 27,618.70 at last check Monday, down from an all time high of almost $69,000 reached in November 2021.
The crypto industry took a hit in 2022 — a year dubbed a "crypto winter" — that saw overall market cap crash by more than $1.4 trillion, and bitcoin lose 64% of its value as the sector suffered a string of high-profile crypto bankruptcies including FTX and Three Arrows Capital.
"If the collapse of FTX was indeed the bottom of this cycle, then history would suggest that we still have approximately 350 days of 'accumulation' before witnessing the characteristic post-halving breakout price action," said Jacob Joseph, an analyst at CCData, according to the Bloomberg report.
