Bitcoin’s Finite Supply May Limit Its Growth, Says Changpeng Zhao
Towards the end of the year, the CEO of Binance, Changpeng Zao, pointed out in a tweet that Bitcoin’s price potential is limitless. Bitcoin is one of the mainstream cryptocurrencies worldwide. Changpeng Zhao is of the opinion that the finite supply of Bitcoin dramatically contributes to its erratic nominal price.
Changpeng also believes that Bitcoin has infinite potential over fiat currencies. The only thing limiting bitcoin is its limited supply.
There’s no assured prediction of Bitcoin prices. Additionally, there are equally no principles that can assure the fairness of the coin’s price. Every day, analysts predict a new price discovery of Bitcoin; however, there is no way to know the price trend.
Apart from the limited supply of Bitcoin, everyone should put in mind two separate factors that are also at play with bitcoin’s price. They include the size of international finance and the local price discovery mechanisms. Local Bitcoin deals mostly determine the premium of the cryptocurrency. It is specific to where hyperinflation exists and where cryptos stand as a hedge counter to the weak local currency.
Bitcoin’s Price Majorly Gets Determined by Market Speculators
The unpredictable Bitcoin price is mainly a reflection of the market speculators’ attitudes. However, increased bitcoin adoption should mean a consequent and impressive uptick in the markets. In some cases, the probability of bitcoin portfolio issuance may cause the well-needed upsurge by the currency.
When there is short term speculation, bitcoin volatility continues to rise. However, the world’s economy may boost nominal bitcoin prices. If market participants expect an increment in Bitcoin prices, hodling may occur, instead of trading. A known fact is the hodlers keep their coins in large scale wallets in anticipation of future turns and the rise of bitcoin’s price. This mechanism is to avoid the inconsistencies that come along with trading.
Some are of the opinion that next year’s halving will open the eyes of many to the bitcoin’s supply limitations.
Furthermore, another suggestion is that the bitcoin halving will reduce the crypto reward to about 900 coins for every miner. The halving may further lower the crypto selling pressure and new coins supply, hence, Bitcoin inflation.