Bitcoin was introduced by “Satoshi Nakomoto” in 2008, which is a crypto currency, which is a web based one. It operates on the basis of blocks of transactions which compete in solving puzzles based in mathematics. The first one which solves the puzzle to clear the transaction will be awarded with 25 bitcoins worth $11000.
Bitcoin transaction is quick and there is no need for anyone to approve and identity will not be revealed. Because of these futures it is considered to be money of the future, yet still it is volatile and is less popular. But 2016 may be a good year for Bitcoin as the money supply growth has slowed down.
As per Daniel Masters, co-founder of Jersey-based Global Advisors' multi-million dollar bitcoin hedge fund, Bitcoin could reach $1100 in 2016 and accelerate to touch $4400 in 2017.
A number of reasons like fast growing investment in “block chain” technology, large companies adopting to Bitcoin transactions and more usage of Bitcoin in China (as a result of Yuan devaluation) contributes to Bitcoin growth. In order to keep a check on inflation of Bitcoin, every four years the reward will be halved. But taken in isolation, the halving of the mining reward will increase the price of bitcoin by Daniel quoted "If OPEC (Organization of the Petroleum Exporting Countries) came out tomorrow and said, 'in six months' time we're going to halve oil production', the oil price would instantaneously react. But the bitcoin market is still in its infancy, and I don't think that factor is discounted into the price fully"
The fact that reward will be halved didn’t affect the growth of Bitcoin’s price which has increased two times in the last quarter of 2015, which was the best period in the past two years. The price touched $500 because of a pyramid scheme coined in China.
That’s not the end of it. It is going to surge high and touch $3500 in 2016 summer, which is almost eight times of this year’s high as per Bobby Lee, the chief executive of one of the leading bitcoin exchanges in China.
Lee further said "Today the worth of bitcoin is $1 per capita in the world (population)," with reference to the total value of Bitcoin circulation globally which is $6.5 billion. He added "For such an innovative, decentralized digital asset, I say 'boy, are we undervaluing it'. But it takes a while for people to realise that."
As mentioned above, mining rewards are halved once in four years which happened in 2012 when the rewards were brought down to 50 from 25 Bitcoin which didn’t affect the increase in price which is about 150% and still more time left before next halving in august 2016. Previously in 2012 one Bitcoin was worth around $12.
Jeremy Millar, partner at London-based financial technology specialists Magister Advisors also expects a sharp increase in value and demand of Bitcoin and he said "It (the halving) dampens supply so, all other things being equal, that puts upwards pressure on price,"
