Changpeng Zhao, founder and CEO of Chinese cryptocurrency exchange Binance. Photo: Twitter

Bitcoin, along with the surging wider cryptocurrency market, has had an incredible start to the year.

The bitcoin price has rallied around 50% since January 1, with some smaller cryptocurrencies making surprise triple-digit percentage gains, and many bitcoin bulls think it still has further to gothough problems could be on the horizon, Billy Bambrough wrote in Forbes. 

Now, Changpeng Zhao (often known simply as CZ), the widely-respected founder and chief executive of the world’s biggest bitcoin and cryptocurrency exchange Binance, has broken his rule against market forecasting to predict “the bitcoin price will likely increase.”

“I personally believe the halving has not been priced in,” CZ told bitcoin, cryptocurrency and blockchain video news site BlockTV this week, adding he “doesn’t usually give market predictions” because he will be wrong “50% of the time.”

Bitcoin traders and investors have begun gearing up for the looming May bitcoin halving event, among other positive bitcoin developments expected this year, when the coin reward for mining new bitcoin blocks is scheduled to drop from 12.5 bitcoin to 6.25 bitcoin – cutting the supply of new bitcoin coming onto the market by half.

There have already been two bitcoin halvings since bitcoin launched in 2009, one in 2012 and another in 2016. Bitcoin halvings are scheduled to continue roughly once every four years until the maximum supply of 21 million bitcoins has been generated by the network, something that won’t happen until well into the next century.

Whether the upcoming bitcoin halving has been “priced in” by the market has become a controversial issue among investors. Generally, in well-developed markets, equity, commodities and currencies are priced based on future expectations – suggesting that as bitcoin traders and investors are aware of the May halving, the price will have already made the gains related to it. 

CZ disagrees, however, telling BlockTV: “The market is not efficient. Most people don’t get information quickly. People need a lot of time to let concepts sink in and adjust.”

Many are hoping the 2020 bitcoin halving will see a repeat of the last cut to supply. Bitcoin prices doubled in 2016 and soared 13-fold the following year.

However, CZ warned that “historic events do not predict future events, so don’t take that too literally,” but explained the bitcoin halving will mean “it costs miners almost double what it does now to produce one bitcoin. Psychologically, those miners won’t be willing to sell below that price.”

The bitcoin price has soared so far this year but has swung wildly in recent weeks. Image: Coin-base

“New bitcoin coming to market will be severely limited and at the same time we’re seeing more users and traders coming in.

“Economic theory tells us that the bitcoin price will likely increase but this is just the theory and hard to predict,” CZ said, adding he’s feeling “pretty positive.”

Meanwhile, the number of people searching Google for the term “bitcoin halving” has been steadily rising along with the bitcoin price.

Analysts at Arcane Research found last month that an increase in searches could be a sign bitcoin’s halving will recapture the wider public interest in bitcoin and crypto that catapulted the bitcoin price to around $20,000 in 2017.

Many other bitcoin and cryptocurrency market watchers share CZ’s enthusiasm, though some think it could be other factors that push up the bitcoin price

“I still think that bitcoin will hit $100,000 by end of December 2021,” Anthony Pompliano, the cofounder of bitcoin and crypto investment group Morgan Creek Digital, said last month, pointing to bitcoin’s “fixed supply” and “increasing demand” as the reason for bitcoin’s performance.

Elsewhere, others are not so upbeat—with the the chief executive of China-based investment advisory group RockTree Capital last month forecasting we could see the bitcoin price dip.

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