Bitcoin Is Expected To Break Records In 2020 Based On The Following 4 Elements
Their combination will create the perfect conditions for a strong bull market.
The year 2020 has only just begun and all eyes are already on the middle of the year in the world of Bitcoin. Indeed, the third Halving in the history of Bitcoin will take place during the month of May 2020. The decrease of the reward for miners from 12.5 BTC to 6.25 BTC will necessarily have a strong impact on the price of Bitcoin.
In fact, the Bitcoin Halving has been expected for many months. This event is so much expected that some would even think that it will not have the effect that the majority of Bitcoiners expect on the price of Bitcoin.
Some believe that the upcoming Halving has already been incorporated into the current Bitcoin price. In my opinion, this is not the case. In addition, other elements will combine with this Halving of Bitcoin in 2020 to create the perfect conditions for a very strong and record breaking bull market for Bitcoin.
Taking into account the Bitcoin Halving, these elements are four in number and I will detail them in the following.
1. Global Political Instability
The year 2020 has been heralded as a particularly politically unstable year at the global level for many months. The first few days of the year proved everyone who felt this way right.
On January 2, 2020, Donald Trump ordered the U.S. Army to neutralize the Iranian General Soleimani who was based in Iraq.
This request for neutralisation led to the death of Iranian General Soleimani near Badgad.
Given the very high rank of this Iranian general, Iran’s foreign minister immediately denounced “a dangerous and senseless escalation” on the part of Donald Trump.
In the aftermath of this event, the price of Bitcoin increased significantly from $6,800 to just over $7,300.
This event confirms, if proof were needed, that Bitcoin is now a true store of value recognized worldwide on an equal footing with gold.
Most worryingly, the situation seems to be getting bogged down between the United States and Iran. The hypothesis of a war is getting stronger every day.
Following the assassination of General Soleimani, Tehran replied that Iran would take its revenge in time for the American affront.
Faced with the hypothesis of revenge, Donald Trump added fuel to the fire by declaring that the U.S. had identified 52 sites in Iran and that the U.S. Army was ready to strike them “very quickly and very hard” in the event of an attack on U.S. personnel or targets by Iran.
In addition to this very tense situation between the U.S. and Iran, which could lead to war, there will be other major elements of instability in 2020:
- The trade war between China and the United States, which although it seems to be easing off, could start up again in the event of a sudden and brutal turnaround by Donald Trump.
- The United States presidential election at the end of 2020 which could reshuffle the cards in terms of regulation, particularly with the GAFA which could be seriously impacted. Such changes would have a strong impact on the financial markets.
- The continuation of the Brexit negotiations between Great Britain and the European Union and then the post-Brexit period which will impact the economies of the member countries of the European Union.
- The situation of North Korea, which could continue its provocations towards Japan and the United States in the coming months.
This list is far from being exhaustive, but it is a good indication of the significant political instability that awaits the world in 2020.
Such instability is likely to benefit Bitcoin, which is increasingly establishing itself as a globally recognized store of value.
2. Global Economic Instability
The last major global economic crisis occurred in 2008. Since 2009, not a year goes by without economists announcing the beginning of the next great economic crisis.
Before the election of Donald Trump as President of the United States in 2016, the U.S. economy seemed to be overheating.
Many economists were calling for Donald Trump to slow down in order to avoid a major economic crisis.
True to his ideas, Donald Trump decided to disregard these opinions and to make the economic machine even faster with an ever-increasing rate cut and intensified money creation.
The result surprised many people, as U.S. businesses adapted and finally increased their productivity levels, allowing the economy to experience an upturn that it had not seen in a very long time.
These excellent economic results obtained by Donald Trump have also benefited the countries of the European Union for example.
Nevertheless, this state of grace may not last and there are signs that it will not be possible to inject money into the economy ad infinitum to ward off the next global economic crisis.
China’s very sharp economic slowdown is an important first warning.
In the coming months, it is likely that the situation will impact other major world economies in the same way. The next major economic crisis is bound to happen sooner or later, and it could be as early as 2020.
Such a global economic crisis would see many people moving towards store of value like gold and now Bitcoin.
Here’s one more element that should boost the price of Bitcoin in 2020.
3. Bitcoin Halving Expected In May 2020
The Bitcoin Blockchain halves the reward for miners who secure their network every 210,000 blocks of validated transactions.
This is done automatically and at the current pace, Bitcoin’s third Halving is expected to take place on May 13, 2020.
The reward for miners will be decreased from 12.5 BTC to 6.25 BTC. This will make the creation of new Bitcoin even more scarce.
If we look at what happened at the two previous Bitcoin Halvings in 2012 and 2016, we can see that the price of Bitcoin has been strongly impacted upwards each time:
The price increase was very marked each time and took place mainly over the 12 months following Halving.
If the price of Bitcoin were to follow a more or less identical behavior, it would therefore be quite conceivable that it would end the year 2020 with a price around $50,000.
4. Bitcoin’s Hash Rate Hits Record Highs At Nearly 120 TH/s
The Hash Rate is a general measure of the computing power made available by miners on the Bitcoin network. The higher the Hash Rate, the more secure the Bitcoin network can be considered.
The Hash Rate is an indicator of the health of the Bitcoin Blockchain as well as its future price.
Thus, a sharply rising Hash Rate is often a sign that the price of Bitcoin will rise sharply in the future.
This correlation has already been proven several times in the history of Bitcoin.
At the beginning of the year 2020, the Hash Rate of the Bitcoin Blockchain has just reached a new record of almost 120 TH/s :
As you can see on the previous chart, the current Hash Rate is almost ten times higher than the Bitcoin Blockchain when Bitcoin reached its record price of $20K at the end of 2017.
This indicates that miners are confident that the price of Bitcoin will reach record highs in 2020.
In fact, they continue to invest in mining equipment because they are confident that they will still be able to make big profits from this mining activity on the Bitcoin Blockchain.
No one knows what the future will be made of. In trying to predict the future, we must rely solely on facts that are proven in the present moment. The 4 elements I have just presented in this article are undeniable facts that will strongly influence the price of Bitcoin in 2020.
Combined, these elements will create the perfect conditions for a strong bull market of Bitcoin in the coming months. Such a bull market would allow Bitcoin to break records in 2020 and see its price surpass the record of $20K reached at the end of 2017.