On Tuesday, November 5, the price of Bitcoin reached just $70,000. On Monday, November 11, just a few days later, the price was now below $90,000, the highest amount Bitcoin has ever reached. While this could be attributed to Donald Trump winning the 2024 US elections, which certainly helps, the picture is seemingly much bigger.
First, it’s worth noting that Donald Trump is apparently responsible for the initial surge, and external factors caused the surge to be much larger. Donald Trump said in October that he wanted to make America “crypto capital of the planet”, even accepting cryptocurrency donations for his campaign trail.
He made positive comments at a bitcoin conference in June this year, which is a stark contrast to what he was saying Newsmax The value of cryptocurrencies was “highly volatile and based on the air” just before he insisted that the US should heavily regulate the currency in 2021. His newfound support for cryptocurrencies, combined with the very vocal support of Elon Musk, who is himself a supporter cryptocurrencies, choreographies, that his office will be favorable to her.
However, Jesse Myersfounder OnrampBitcoinwhich offers bitcoin financial services, suggests that this recent raise is related to post-halving, the act of halving the amount of bitcoins generated daily. As this number drops, the incentive to mine the coin decreases, effectively forcing a level of scarcity in the coin.
This is intended as a countermeasure to broader inflationary trends and is part of the coin’s intended employ as an actual currency. In total, only 21 million bitcoins can be mined, and less than 20 million have already been found, so post-halving is preventing the world from reaching the total any faster.
Speculative trading of this coin in particular is partially responsible for the astronomical numbers we typically see, as those who stockpile the coin see it grow and potential market participants are discouraged by it.
Importantly, such a halving occurs every four years, and bitcoin sees a sudden raise a few months after the halving each time. Trump’s victory appears to have led to a surge, but the surge only grew to such a high level due to the ongoing scarcity of the coin.
A post-halving event also took place in April 2020, when we saw the sharpest percentage price raise since the coin’s inception. So whoever wins the 2028 presidential race will likely do the same.