Changpeng Zhao, founder and CEO of leading cryptocurrency exchange Binance, claims the added value of May’s halving event has yet to be priced into bitcoin.
Speaking in an interview with BLOCKTV on Wednesday, Zhao shared his belief that the halving has yet to be priced into bitcoin, suggesting upward movement for BTC in the lead-up to May’s block reward reduction.
Zhao cited historic trends as evidence that bitcoin’s price will likely appreciate more from the halving, in addition to the reduction in inflation from fewer coins entering circulation. He also anticipates an influx of users and investors into cryptocurrency.
The demand side is increasing, the supply side is decreasing.
While the CEO provided the caveat that past events do not always predict the future, he believes miners will be unwilling to sell their BTC at a loss, thereby reducing the supply and driving up demand. A recent report by analytics firm Tradeblock claims the cost of mining a single BTC will increase from $6,800 to $12,500 following the block reward reduction.
Despite the investment interest generated by May’s halving, Zhao says a psychological barrier exists around the $10K price point, causing the current market volatility.
There are psychological barriers around nice round numbers. So 10,000 is a very nice round number, so [...] the price will fluctuate back and forth around that a bit.
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