Gold is trading above $2,000 an ounce and is near all-time highs.
One reason for these gains is that gold miners are facing challenges keeping up with demand. Miners are expected to increase production just 0.9% a year for the next five years.
Global production at gold mines remains below its 2018 peak. Environmental concerns make it more difficult to open new mines or expand existing ones. So to increase output, miners need to operate more efficiently.
This same scenario of increasing scarcity and rising demand could drive bitcoin (BTC) to new highs — and provide those who position themselves now some lucrative trades in the crypto bull.
Why BTC Prices Are Bound to Rise
By now, you’re probably aware that the next bitcoin halving is coming in April.
The halving is a technical process. But in simple terms, it’s similar to your boss telling you that you’ll get paid half as much for doing the same amount of work.
For bitcoin, individuals and companies use powerful computers to solve complex problems. When they solve a problem, they add a “block” of transactions to the bitcoin network (this is known as the blockchain).
As a reward, they get some new bitcoins. This process is called “mining.”
About every four years (or every 210,000 blocks to be exact), the reward for mining is cut in half. For example, when bitcoin first started, miners received 50 BTC as a reward. After the first halving, it dropped to 25. Today it’s 6.5. Next month, that drops to 3.125.
The halving was coded into bitcoin by its creator to control the total number of BTC that will ever exist (21 million). By reducing the reward for mining, the rate at which new BTC are created slows down over time.
This should have an obvious effect on pricing. Because fewer new bitcoins are being created, they become scarcer. If demand for bitcoin remains the same or increases, this scarcity could potentially drive up the price.
The recent launch of bitcoin exchange-traded funds (ETFs) points to an increase in demand.
One expert calculated that “the launch of the ETFs on the 11th of January has led to an average daily demand of 4500 bitcoins (trading days only), while only an average of 921 new bitcoin were minted per day.”
This math already favors higher prices and explains the recent rally in bitcoin. Now, halve the new bitcoins per day, and you can see how the rally could continue.
Of course, bitcoin is just one cryptocurrency. There are thousands of others, known as altcoins. Among these, many are poised to rally far more than bitcoin.
This presents incredible profit opportunities, especially for those who understand the market beyond bitcoin.
Our crypto expert — Ian King — has been researching and trading the crypto market for years. He knows how to target the most promising windfalls in this rapidly-evolving space while avoiding the traps and scams.
Now, he wants to make sure you don’t miss out on the potential to benefit from this halving cycle.
Ian explains exactly how he’ll help you make money — from a powerful pattern he’s identified in crypto market in his new presentation right here.
Regards,
Michael Carr
Editor, Precision Profits
