Interest in Bitcoin is on the rise, and it could have a lot to do with a pivotal event just days away: the Bitcoin halving.
Bitcoin today broke $9,800 per coin for the first time in nearly three months. The crypto asset is now up nearly 6% in price since yesterday. And the boost has brought total cryptocurrency market capitalization to a whopping $265 billion—a $15 billion increase from the previous afternoon.
The price rally comes just days before Bitcoin’s third halving, scheduled to take place sometime on May 12. The halving is an event baked into Bitcoin’s code which cuts the rewards for mining blocks on Bitcoin’s blockchain in half, thus reducing supply and keeping inflation in check.
It only happens once every four years, and the anticipation for this year’s halving is outpacing the two previous.
Bitcoin’s user base is now surging, with new addresses having spiked by close to 50% since the beginning of the year. The idea, according to some analysts, is that the drop in supply could drive Bitcoin’s price even further up in the months ahead.
But the halving may only be part of the equation. Since mid-March, the United States has released trillions in stimulus money and federal aid to individuals and small businesses as a means of combating the economic strife brought on by the ongoing coronavirus pandemic.
According to Pascal Gauthier—CEO of digital wallet company Ledger—this excessive money printing and release of funds has got people turning to Bitcoin and other cryptocurrencies. Gauthier said his company matched a previous all-time high in sales for its flagship hardware wallet on March 15—the same day the stimulus package was announced.