Bitcoin Halvings are Bull Market Things: 10 Coins to Buy Before the Next Crypto Bull Run

 

Introduction

A Bitcoin halving is an event that occurs approximately every four years in which the rewards given to miners for verifying blocks of transactions on the Bitcoin blockchain are cut in half. This event has a significant impact on both the miners and the entire cryptocurrency market.

What Are Bitcoin Halvings?

Bitcoin halvings are a regular event that occurs approximately every four years in the Bitcoin network. Halving events effectively reduces the rewards miners receive for maintaining the network by 50%. This event is specifically programmed into the network as a way to control the Bitcoin supply and create a deflationary monetary policy.

Bitcoin had its first halving event on November 28th, 2012 and since then, halving events have been occurring approximately every four years. On 11 May 2020, the third halving event occurred resulting in an eventual decrease in the number of bitcoins miners receive per block from 12.5 BTC to 6.25 BTC.

The significance of Bitcoin halvings is two-fold: 1) miners will need to adjust their operations to be sustainable with only half the revenue, and 2) as a result of the halving, the inflation rate of Bitcoin will be reduced by 50%. A decreased supply of Bitcoin will also lead to an increase in its market value as the demand for the cryptocurrency remains the same or rises.

The potential implications for investors are generally seen as positive. As the supply is reduced, the price of Bitcoin is expected to rise as there is now less of it to go around. This is especially true in times of high demand, as the high demand paired with low supply will push the price of Bitcoin even higher. As such, investors can benefit from buying Bitcoin prior to a halving event, as the price should increase during and after the halving.

Bitcoin Halving History

The halvings of 2012 and 2016 had a huge impact on the price of Bitcoin. They served as a catalyst for rapid price appreciation and led to the formation of the famous “halving bull market” pattern.

The 2012 halving marked the start of a new bull market, with Bitcoin increasing in price from $2 to as high as $1250 in December 2013. This bull market was driven by increasing awareness of Bitcoin among the public, adoption by merchants, and speculation fueled by new investors.

The 2016 halving was also a major turning point for the price of Bitcoin. After the halving, the price rose very rapidly from about $430 to a peak of nearly $20,000 in December 2017. This bull market was fueled by increased mainstream adoption, improved scalability solutions, and institutional investors entering the market.

One pattern that has emerged from both of these halving-driven bull markets is that prices tend to increase sharply in the lead-up to the halving event, followed by a sharp correction in the immediate aftermath. Following the correction, the market then enters a period of consolidation before the next wave of bullish price appreciation. As a result, investors need to be aware of the timing of a halving event and be prepared to enter and exit the market at the appropriate times.

10 Coins to Buy Before the Next Crypto Bull Run

1. Bitcoin: The first decentralized digital currency, Bitcoin uses peer-to-peer technology to deliver secure, low-cost transactions. Uniquely, Bitcoin’s protocol is open source and rewards miners for solving complex cryptographic puzzles. Bitcoin has the highest market capitalization of any cryptocurrency, surpassing the $200 billion mark, and is historically one of the most successful assets with an average annual return of 170 percent since its inception in 2009.
2. Ethereum: Ethereum is a decentralized platform for applications that run exactly as programmed without any chance of censorship, fraud, or third-party interference. The blockchain technology behind Ethereum enables developers to build smart contracts and decentralized applications. Ethereum currently has a market capitalization of roughly 85 billion and is considered a rival to Bitcoin as one of the most successful cryptocurrencies.
3. Ripple (XRP): Ripple is a real-time global payment system that enables banks and enterprises to transact directly with each other. Ripple is the third most valuable cryptocurrency by market capitalization, with a current market capitalization of $ 35 billion. Ripple is also notable for its multitude of partnerships with banks and financial services companies, such as Western Union and Santander.
4. 4. Litecoin: Litecoin is an open-source software project released under the MIT/X11 license which enables the peer-to-peer payment of cryptocurrency. Litecoin provides faster transaction confirmations (2.5 minutes) compared to Bitcoin (10 minutes) and has gained significant traction due to its low transaction fees and scalability. Litecoin has a market capitalization of 7.6 billion and has outperformed Bitcoin historically, with an average annual return of over 200 percent since its birth in 2011.
5. EOS: EOS is an open-source software platform built on blockchain technology that enables developers to build, host, and deploy decentralized applications. EOS is particularly notable for its consensus algorithm called delegated proof-of-stake, which enables faster and more secure transactions. Its market capitalization is currently 6.7 billion and is seen as a competitor to Ethereum due to its platform-based approach to DApps.
6. Tezos (XTZ): Tezos is a decentralized open-source blockchain system that facilitates smart contracts and decentralized applications. The platform is particularly remarkable for its utilization of secure, on-chain governance which allows for its protocol to evolve and improve over time. Tezos has a market capitalization of 1.9 billion and has seen an average annual return of 135 percent since its inception in 2018.
7. Binance Coin (BNB): Binance Coin is the token used to transact on the Binance cryptocurrency exchange. BNB enables users to receive discounted trading fees, as well as access exclusive features on the Binance exchange. Binance Coin has a current market capitalization of 5.5 billion and has been a remarkably successful asset, with an average annual return of almost 600% since its launch in 2017.
8. Vechain (VET): Vechain is an enterprise blockchain-as-a-service platform that enables companies to build and deploy decentralized applications. Vechain uses its native token, VET, to facilitate the trading of physical goods and goods on its blockchain platform. VET’s market capitalization currently stands at 3.7 billion and has had an average return of over 800% since its launch in 2018.
9. Neo: Neo is a blockchain platform that enables developers to build and deploy decentralized applications, and issue tokens on its blockchain. Neo has a unique consensus mechanism based on the delegated Byzantine Fault Tolerance algorithm, which allows for faster and more secure transactions. Its market capitalization currently stands at 3.3 billion and has had an average return of 100% since its launch in 2017.
10. Cardano (ADA): Cardano is an open-source computing platform that facilitates the development of decentralized applications and smart contracts. ADA is the native cryptocurrency used to interact with the Cardano blockchain and has a current market capitalization of 3.2 billion. Cardano has seen a remarkable increase and has outperformed Bitcoin with an average annual return of over 800% since its launch in 2017.

Investment Strategies and Risk Management

1. Dollar-Cost Averaging: This is a strategy that involves making investments evenly over a period of time, rather than investing a large sum of money all at once. By investing the same amount on a regular schedule (weekly or monthly, for example), this technique reduces risk by reducing the total amount of exposure to volatile markets.
2. Diversification: Diversification is a key investment strategy that involves investing in a wide variety of different crypto-assets, industries, and countries to spread out the risk. By investing in multiple asset classes, you can mitigate the effect of any volatility in specific markets.
3. Risk Management: Risk management is a must when investing in the cryptocurrency markets, as it involves setting limits on your investments and understanding potential losses that can occur due to market volatility. Make sure to set realistic expectations for potential gains and losses that come with the investment, to avoid getting too caught up in chasing higher gains.
4. Setting Realistic Expectations: It’s important to set realistic expectations when investing in the cryptocurrency market. While there’s the potential for high rewards with crypto investments, there’s also the potential to lose it all as well. Without proper research and risk management, one could end up losing much of their investment. Make sure to do your due diligence and have a well-thought-out plan before investing.