Back in November 2019, AAX accurately forecasted the approaching Bitcoin halving months ahead of time.
Bitcoin was designed from the start to reward the miners who secure the blockchain and process transactions. This block reward is programmed to decrease over time—roughly halving every four years—as its demand and value are expected to increase.
Historically, Bitcoin's price has seen substantial gains in the months following a halving. Once again, we find ourselves at such a pivotal moment.
However, this cycle may differ from the last one in 2017. Back then, Bitcoin was caught in a frenzy of hype, with its price skyrocketing to nearly $20,000 in December, only for panic selling to trigger a bear market and a prolonged crypto winter.
Now, six months after the latest halving—and despite the March market crash and ongoing pandemic uncertainty—Bitcoin has rallied back above $18,000, with many anticipating it will soon reach new all-time highs.
What's Different About This Rally?
A major catalyst for Bitcoin's current surge is the involvement of heavyweight institutional investors like Paul Tudor Jones and Square, coupled with PayPal's recent announcement of Bitcoin support. These developments are the result of a gradual trend, as more institutional-grade exchanges, custodians, and financial players enter the crypto space.
These moves carry significant weight. They not only lend greater legitimacy to Bitcoin as an asset class but also signal the potential for substantial new capital to flow into the market, which could drive prices higher and improve market stability.
However, as we saw during the black-swan event in March, institutional investors can be just as quick to sell Bitcoin under extreme pressure as retail traders. So, institutional interest alone may not be enough to set this rally apart from past speculative bubbles.
According to Chainalysis research, other factors are in play. A key one is that Bitcoin is becoming genuinely scarce as a tradable asset.
While the amount of liquid Bitcoin is similar to levels seen during the 2017 bull run, the quantity held in illiquid wallets (by long-term HODLers) is much higher—nearly 77% of the 14.8 million BTC mined so far (excluding lost coins). This leaves only about 3.4 million BTC readily available for buyers, even as demand continues to grow.
Bitcoin appears to be fulfilling its intended role. Amid global economic disruption from the pandemic, rising geopolitical tensions, inflation fears, and eroding trust in traditional institutions, Bitcoin is increasingly seen as a "people's" currency—freely tradable without reliance on banks, governments, or intermediaries.
Of course, a look at the industry infrastructure built around Bitcoin reveals extensive integration with regulations and fiat on-ramps. Yet, at its core, Bitcoin's reputation as a safe-haven asset continues to strengthen.
How to Buy Bitcoin
AAX provides several easy ways to buy and sell Bitcoin.
First, register and verify your account on AAX. Then, head to "One-Click Buy" to purchase Bitcoin instantly with a credit card using one of over 20 fiat currencies.
You can also use AAX's OTC trading platform to buy or sell Bitcoin directly with verified merchants in a secure and reliable manner, exchanging it for multiple fiat currencies, including HKD.
Once you have Bitcoin in your AAX wallet, you can deposit it into AAX Earn to generate interest. You can also trade it for other cryptocurrencies or use it as collateral for futures trading.
Click to learn more about buying Bitcoin, open an account at AAX (www.aaxpro.com), or download the app to experience a next-generation cryptocurrency exchange.
About AAX Academy
AAX is a digital asset exchange powered by LSEG Technology. AAX Academy is our user education channel, designed to help newcomers learn the basics and build foundational knowledge about blockchain.