Bitcoin halving "supply shock" is driving BTC rally, says VC

16 Jun, 2019
by Will Heasman
Bitcoin halving supply shock is driving BTC rally, says VC

Bitcoin’s 2019 rise has been a wild ride, but for the most part, it has been a journey which has taken us almost entirely up. As people start to piece together the reasons for this monumental rise, one venture capitalist believes there is only one reasonable explanation, the 2020 Bitcoin halving…

As of right now, Bitcoin is citing a year to date return of just over 140%, far surpassing the gains of any legacy assets such as gold, and blowing the stock markets well out of the water.

In short supply

As for why, Alyse Killeen - managing partner of StillMark Capital - believes that the rise is due to the expectation of what she dubbed a looming “supply shock” emanating from the imminent 2020 Bitcoin halving:

"What I think might be happening is an anticipation of a coming supply shock in 2020," says Killeen, speaking to Bloomberg.

"In 2020 we'll have just half the daily supply of bitcoin that we do now."

While we're looking ahead to this supply shock and halvening event, we're also seeing greater demand for Bitcoin and new on-ramps for more familiar and conventional sources. There's the anticipation that there will be a broader group of users and consumers who have an appetite for Bitcoin," Killeen said.

Indeed, the halving countdown has begun, and many crypto aficionados are already gearing up to what many assume will provide yet another catalyst for BTC.

In the past Bitcoin has seen a major upswing in price proceeding a halving, for example, Bitcoins price one year before the first halving was $2.55, one year after it was $1037, Similarly, the price before the 2nd halving was $268, and after it stood at $2,525.

In essence, the less BTC being produced, the more valuable Bitcoin is thanks to reinvigorated scarcity.


Kileen also noted Bitcoins budding developments such as it’s Lightning Network – a 2nd layer protocol aiming to purge the #1 of its scaling plague – as well as citing evolving use cases within Bitcoin:

"advancements at bitcoin's core protocol level, such as SegWit ... help us to see a greater variety of use cases of the technology itself. Some of these developments are among the most exciting things happening in the Bitcoin world right now."

Do you think Bitcoins halving event is causing its 2019 rise? Let us know your thoughts in the comments below!

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