Bitcoin staging a comeback like the 2017 bubble frenzy

It’s been left for dead more than once, written off as nothing but a bubble and denounced as rat poison by one of the world’s most famous investors. Yet Bitcoin is once again staging a comeback reminiscent of the token’s glory days, with evangelists pegging their hopes on a technical event as the new catalyst.

True believers say the gains are driven by Bitcoin’s upcoming halving, when the rewards miners receive for processing transactions will be cut in half as soon as May 12. The internet is glutted with second-by-second countdown clocks and the mania is even spurring a hike in hiring by crypto firms worldwide. Bitcoin has rallied to more than US$9,000 in anticipation from around US$6,000 just a month ago.

“Narratives in the world of blockchain act like the Force in Star Wars — they mysteriously move and shape the market,” said George Mcdonaugh, co-founder of crypto and blockchain investment firm KR1. “You couldn’t be blamed for getting a little excited about what’s to come.”

Bitcoin halvings, which slow down the rate at which new tokens are created, happen once every four years or so. Its third such event is set to occur next week. Skeptics argue crypto prices are notoriously volatile and often difficult to pin explanations to, positing that any appreciation should be priced in ahead of time. But crypto fans cite historical precedent.

Bitcoin’s undergone two prior halvings, which saw its price appreciate. The world’s largest token rose from around US$12 to over US$1,000 in the year following its 2012 cut in rewards, and advanced about 1,000 per cent in the wake of the 2016 halving.