eToro‘s top analysts are looking forward to Bitcoin’s halving on the 12th May. Simon Peters, analyst at the investment platform, says the event could not only see the price of bitcoin rise, as it has done following previous halvings, but it could also result in a whole new brand of crypto investors.
Bitcoin, the world’s best known and arguably most successful crypto, will undergo its third halving event in its history. This will see the block halve from 12.5 to 6.25, and many analysts believe that a long bull run will follow, according to eToro.
The trading platform said that with each extended bull run there has been an increased interest in bitcoin and crypto as an asset class, and with that has come a widening of the investor base, usually as a result of greater coverage in the mainstream media.
eToro analyst “During and after the first halving in 2012, the key investors were those already involved in the asset class. The bitcoin investor base was almost exclusively made up of those in the know; blockchain scientists and data programmers as well as libertarians interested in the idea of a monetary system outside of political influence and central bank control”, said eToro analyst Simon Peters.
Bitcoin’s price went from $13 on the day to a peak of $230 within six
months after the 2012 halving event. In 2016, Bitcoin’s halving provided a watershed moment for bitcoin as it led to the 2017/18 price rally, and subsequently brought the topic of crypto into public consciousness, according to Simon Peters.
“After the halving in 2016, bitcoin exploded, both in terms of price and popularity. National newspapers were writing about bitcoin. Alongside the computer programmers and blockchain scientists were ordinary people, from management consultants to electricians and hairdressers. Suddenly bitcoin was on everyone’s lips”, Peters continued, adding that he noticed a massive uptick in people investing in bitcoin on the eToro platform during the 2016 halving and expects similar levels of investment again.
“In 2017 and 2018, 70% of people came to eToro to invest in crypto. Since then, the crypto industry has matured, with talks of regulation, institutional investors entering the market and even central banks expressing an interest in the asset class. Combine this with another price rally expected after the 2020 halving, and we could be on the precipice of crypto becoming a mainstay of investors’ portfolios in the same way as stocks, bonds and commodities”.
FOMO – fear of missing out – plays a key role in eToro’s forecast of a price surge in Bitcoin. “I get questions from clients asking if they have missed their chance to get into crypto. The price is currently hovering around the $9K mark and if it starts heading towards the $20K highs seen in the last rally, I expect even more people will want a slice of the action.”
In regard to the regulatory framework, eToro believes a sustained price rally would likely accelerate policymakers’ discussions around crypto regulation in order to protect consumers. According to Regulation is viewed as the tipping point for IFAs and wealth managers to feel comfortable talking to their clients about the asset class. So, this could eventually lead to a consolidation of Bitcoin’s position within the trading industry to a rate whereby including a crypto allocation in people’s pensions may not be such a ludicrous idea, according to
“There are already a number of instruments such as exchange traded notes that track cryptoassets, as well as investment companies that already have exposure to the asset class. As pension funds naturally respond to demand from their members, we may see a time where those demands include an allocation to cryptoassets.” Peters concluded.