Three Factors to Increase the Value of Bitcoin
World-renowned strategist stated that she now looks at Bitcoin, which did not attract her attention, from a more positive way. She explained this view for three reasons.
Strategist Lyn Alden stated that while the person who did not look at Bitcoin positively in 2020, BTC’s rise to the uptrend after its collapse in March, has now gone to a more optimistic direction.
Lyn Alden Investment Strategy Founder Alden said:
“Regardless, I don’t see a big bull market in terms of Bitcoin, but I’m not someone who looks clearly at it clearly. As someone who invested in many asset classes, there are three reasons why I look more favorably towards Bitcoin earlier this year.”
Three reasons Alden claims; famine, halving and escape from inflation.
Unlike traditional financial assets, BTC supply is stable. In this context, even more scarcity than gold is on the agenda. Over 21 million BTC cannot be produced, which makes Bitcoin a deflationary currency.
Alden says that famine is a factor that can raise the price of Bitcoin. It is also a factor that BTC does not have a central organization that can change its monetary policy. For this reason, if the demand for Bitcoin continues to increase, its value may increase as the supply will remain the same.
“The Bitcoin protocol is restricted to a total of 21 million coins. This leads to a shortage in the market. Therefore, it potentially increases its value. If there is demand, of course.”
Bitcoin supply is not enough to increase the value of BTC. The market must also have a demand to support it. However, Bitcoin has other features that make it more practical, such as applicability, portability, unchanging processes and lack of a center.
On May 11, the third block prize halving process of the Bitcoin blockchain network was made. After this event, which is almost every four years, the existing Bitcoin production is halved.
The reason for the halving process is to gradually lower BTC production as it reaches a maximum supply of 21 million.
In May 2020, billionaire hedge fund investor Paul Tudor Jones had praised Bitcoin and considered it “great speculation”.
Tudor Jones stated that he left 1 percent of his personal assets for Bitcoin. He claimed that BTC was a safe haven due to possible devaluation in cash.
Similarly, Alden stated that financial hedge funds are investing or experimenting in Bitcoin.