By CNBCTV18.comFeb 22, 2022 5:53:35 PM IST (Published)
Bitcoin is facing macroeconomic resistance that may lead to a bear market for the world’s biggest cryptocurrency in the near future.
Bitcoin may see its next great bull run only in 2024 or maybe even 2025, according to the co-founder of one of the world’s biggest cryptocurrency exchanges. Bitcoin is down by 30.93 percent year-over-year, but it has pared some of the losses it sustained in January.
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According to Du Jun, Co-Founder of Huobi, Bitcoin may only see a new bull run in 2024 or 2025 once the blockchain sees a new halving.
“Following this cycle, it won’t be until end of 2024 to beginning of 2025 that we can welcome next bull market on Bitcoin,” Jun told CNBC.
Halving and its implications
Halving is a process in the Bitcoin blockchain where the Bitcoin rewards to miners is ‘halved’ every four years, which drives the prices, further incentivising miners to continue mining the virtual asset. Currently, the reward is 6.25 Bitcoins and there are approximately 18.9 million Bitcoins in circulation, against the maximum limit of 21 million.
The last halving took place in May 2020 and about 1.5 years later, Bitcoin hit its all-time high in November 2021. The price growth seen was 682.2 percent to $69,000 from the time of halving.
‘Hard to predict’
Jun told CNBC that the price of Bitcoin closely follows that of the halving process. He added that Bitcoin appeared to be in the early periods of a bear market, but global macroeconomic conditions were making it harder to predict the trajectory of the asset accurately.
“It is really hard to predict exactly because there are so many other factors which can affect the market as well -- such as geopolitical issues including war, or recent Covid, also affect the market,” he said, according to a CNBC translation of his comments in Mandarin.
Bitcoin’s future price appears to be highly volatile with many analysts predicting that Bitcoin is entering a bear market. According to a recent investment note from Stifel, an international Investment banking company, Bitcoin may plummet $10,000 by 2023 due to macroeconomic headwinds as well.
(Edited by : Shoma Bhattacharjee)
