What’s going on with bitcoin? Cryptocurrency is following price prediction model ‘with astonishing precision’

Bitcoin’s recent price crash, which saw it lose a quarter of its value after hitting an all-time high, could be just the “midway dip” in a new record-breaking rally if market patterns from 2013 and 2017 are repeated.

This is the view of a number of prominent cryptocurrency analysts, who adhere to a “stock-to-flow” model dictated by bitcoin’s inbuilt scarcity.

The model is based on the relationship between the existing stockpiles of bitcoin and the yearly production rate of new bitcoins through digital mining. Roughly every four years, a “halving” event occurs that reduces the rewards for mining the cryptocurrency by 50 per cent. After the first halving in 2012, bitcoin’s price rose from around $11 to $1,100 before falling back down. The second halving in 2016 saw bitcoin’s price rise from $500 to $20,000 before dipping again.

The most recent halving event took place in May 2020, right at the beginning of the latest price rally. It has since risen from below $10,000 to the new all-time high of $64,863 that it hit this month. After briefly falling below $48,000, it has since recovered slightly to $55,000 at the time of writing.

This latest dip appears to be similar in scale and timing to other dips experienced following the 2012 and 2016 halvings.

Read more: msn