In a clear sign of improving comprehension about the fundamentals driving the bitcoin price, newly minted “friend of crypto” Joe Kernen just made a convincing case on national television that the cryptocurrency could surge nearly 500 percent by next May.
Citing the upcoming halving in 2020, the CNBC Squawk Box host noted the possibility of BTC/USD hitting $55,000 in just 10 months.
The argument that Kernen was referencing is based around the supply/demand dynamic in bitcoin’s protocol.
By cutting the number of BTC awarded per block in half every four years, the amount of new BTC entering circulation is sharply reduced. In this case, 2020 will see the inflation rate drop from 12.5 BTC per block to just 6.25 BTC.
This naturally makes it more expensive to mine bitcoin, and – other things equal – bolsters the BTC price.
The price of bitcoin surged ten times higher in the aftermath of the last halving in 2016. It’s easy to see why this time could be equally dramatic.
Looking at the price of bitcoin today, it is apparent that a holding pattern has set in.
Some of the market’s euphoria has been driven out following the government’s verbal crackdown on Libra, but bulls will remain hopeful so long as the crucial $9,000 level holds. A sustained move below this mark threatens to flip the script and would suggest another leg down is on the cards.
Naturally, when a prominent individual like Joe Kernen entertains such a bullish argument for bitcoin, Crypto Twitter won’t be far behind cheering him on. This was such an occasion, and there was the expected fanfare for the recently crowned “Bitcoin Joe.”
CNBC’s Squawkbox is a high-profile platform, and Kernen’s attention to the correlation of supply/demand dynamics to the BTC charts is a breath of fresh air.
However, judging by the shocked reactions on the faces of his co-hosts, crypto education still has a long way to go.
Last modified: March 4, 2021 2:39 PM