About 85 pc of world’s cryptocurrencies are not even worth a cent: Report
About 85 per cent of the world’s cryptocurrencies are worth less than one cent, according to a report on Monday.
There is a buzz in the crypto market regarding the halving of bitcoin in a couple of days.
This technical event happens every four years. It is when the rewards for Bitcoin miners are cut in half.
Some crypto enthusiasts intone the halving like a religious event with near-mystical importance as they believe its mechanics are crucial to bitcoin’s continuing price surge.
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With the halving of Bitcoin, it reduces the pace at which new bitcoins enter the market.
But the Bitcoin had already hit a new record high, before the halving has taken place due to the approval of spot bitcoin exchange-trade funds has excited the market and brought in lots of demand for the cryptocurrency.
Since there will only ever be 21 million bitcoins, the halving serves to create more scarcity.
After bitcoin’s first halving in November 2012, bitcoin’s price rose from $12.35 to $127 five months later. After the second halving in 2016, bitcoin’s price doubled to $1,280 within eight months.
Between the third halving in May 2020 and March 2021, bitcoin’s price rose from $8,700 to $60,000.
But this time, the JPMorgan expected the bitcoin to fall after the reward halved. The bank’s analysis shows that the cryptocurrency remains overbought, and miners will be most affected by the event.
JPMorgan also notes that venture-capital funding remains subdued despite the recent crypto market resurgence.
Post halving event, it is also likely that some bitcoin mining firms may look to diversify into low energy cost regions such as Latin America or Africa to deploy their inefficient mining rigs to gain salvage values from those rigs which would otherwise sit idle, it said
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