Bitcoinmania: A Ticking Time Bomb Waiting to Explode

Abstract

At the time of writing this article, the Bitcoin bomb has exploded; after peaking at $64,863 on 14 April 2021, the value of Bitcoin has plunged 45% to $31,276 on May 21, 2021; consequently, nearly $600 billion of value evaporated from Bitcoin’s market cap, i.e. from $1.182 trillion (April 2021) to less than $600 billion (May 2021). Bitcoin’s high price valuations coincides with its halving dates; aftermath of each halving event has led to a bubble formation within one year and a crash in the ensuing few months after a perceived peak has been achieved. The three previous halving events are a testimony to this fact; after the halving #1 on 28 November 2012 (block reward was reduced from 50 BTC to 25 BTC), price of each bitcoin increased from $76 on 9 July 2013 to a peak of $1,153 on 5 December 2013, an increase of 1,417% (but fell to $177 in January 2015). Following the halving #2 on 9 July 2016 (block reward was reduced from 25 BTC to 12.5 BTC), the price of bitcoin charted a remarkable ascent, from $963 on 2 January 2017 to $20,089 on December 17 in the same year (a surge of 1,986%, followed by a nosedive to $3,557 in January 2018). The halving #3 has been most unprecedented by any stretch of imagination, the value of each bitcoin has skyrocketed from $7,194 on 1 January 2020 to $64,863 on 14 April 2021; however in the subsequent month (May 2021), Bitcoin gave back half of the gain (price reduction of 20% or more could be considered as a major correction). It is important to mention that Blockchain is not confined to Bitcoin and its survival as a revolutionary technology does not depend on cryptocurrencies. Bitcoin and some altcoins may become obsolete, but blockchain will continue to forge ahead unabated as many life-changing inventions have done before.