Bitcoin hits R1,000,000

The value of bitcoin went through R1 million on South Africa’s major cryptocurrency exchanges in the early hours of Thursday morning.

Bitcoin last hit these levels on 8 November 2021. However, in dollar terms, it was trading at over $66,000 per bitcoin back then.

Later that month, Bitcoin hit an all-time high of $69,000.

Bitcoin is currently trading at $52,500 — much lower than in November 2021.

This shows how much the rand has weakened in the past two years.

On 8 November 2021, the rand was around R15.20 to the dollar. Today, it is over R19 — a 25% drop in value against the greenback.

In a statement regarding the milestone, cryptocurrency exchange and wallet provider Luno said the performance of Bitcoin exchange traded funds (ETFs) buoyed renewed investor confidence.

These have attracted over $34 billion from investors since being approved by the US Securities and Exchange Commission on 10 January.

Luno said the influx of institutional money via ETFs is evidence of a positive shift in how traditional investment institutions view cryptocurrencies.

Bitcoin’s market capitalisation, the total of all Bitcoins in issue, surpassed $ 1 trillion yesterday amid recent traditional market unrest fuelled by higher-than-expected CPI inflation data in the US.

Several analysts anticipate continued growth on the back of ongoing bullish sentiment, Luno stated.

“Another potential reason for the price uptick is the Bitcoin halving expected to take place mid-April 2024,” said Luno South Africa country manager Christo de Wit.

“Roughly every four years, Bitcoin rewards paid to miners are cut in half as a way to ensure that an infinite supply of bitcoin doesn’t erode its value further down the line,” De Wit explained.

It should be noted that Bitcoin’s protocol dictates that its supply is capped at 21 million coins.

CoinMarketCap reports that there are currently 19.63 million bitcoins in supply. This means only 1.37 million remain to be mined.

Because of the halving mechanic, the last bitcoin will likely only be mined in 2140.

“Each previous halving has historically had a major impact on the price,” said De Wit.

He said the first halving saw price increases of more than 8,000% from pre-halving levels.

Bitcoin’s value also increased roughly 3,000% over the second halving cycle in 2016.

Between the third bitcoin halving on 11 May 2020 and the all-time high on 10 November 2021, the price of bitcoin increased around 740%.

The last halving in 2020 was followed by a bull run that ended in an all-time high price of almost $65,000.

Bitcoin’s next halving event is expected to happen on 14 April 2024.

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Bitcoin hits R1,000,000