Bitcoin has recorded a 900% rise in value in the past 12 months, taking its price from $6,423 on April 1, 2020, to around $60k in 2021. While it is an astronomical change, the cryptocurrency is still far from the gains it made in previous bull runs, recorded in 2013 and 2017, respectively.
Based on past performances, cryptoanalysts at Bloomberg believe that Bitcoin can reach the $400,000 mark in 2021. However, the prediction isn’t just wishful thinking. It takes into account the impacts of the 50% reductions in rewards on the Bitcoin Blockchain.
The reduction occurs every four years and is followed by huge gains for BTC. Similar trajectories were observed after the reward-halvings in November 2012 and July 2016. On both occasions, Bitcoin recorded close to a 50-fold increase in value after reaching record lows for volatility.
The previous reward reduction occurred in May 2020, creating an 18-month window for a Bull-run. Meanwhile, the volatility gauge almost reached the previous all-time low in September when the value of the asset was just $11,000.
While past performances don’t guarantee similar performances, BTC has “only” recorded a five-fold increase since September, making it entirely possible that the digital asset is yet to peak in 2021.