Bitcoin prices topped the $10,000 mark for the first time in three months Friday ahead of next week's 'halving' event that will slash the value miners will receive for harvesting new cryptocurrency transactions.
Bitcoin briefly traded past the $10,000 mark in overnight dealing in Asia and was last seen hovering at $9,980.00 each during early New York hours, heading into next week's halving. Bitcoin prices have more than doubled since early March, alongside a 28.7% gain for the S&P 500, amid concerns for hyperinflation triggered by trillions in coronavirus stimulus plans from major central banks around the world.
"We are witnessing the Great Monetary Inflation - an unprecedented expansion of every form of money unlike anything the developed world has ever seen,” said billionaire investor Paul Tudor-Jones said earlier this week, after indicating his Tudor BVI hedge fund has added bitcoin futures to its portfolio.
In the case of rising inflation, Tudor-Jones wrote, “the best profit-maximizing strategy is to own the fastest horse ... if I am forced to forecast, my bet is it will be Bitcoin."
The popular cryptocurrency's run could be tested, however, by a technical change in its architecture that -- ironically -- was designed to prevent digital currency inflation.
In its simplest form, Bitcoin halving reduces the amount of tokens miners -- the data-hogging computer programmers that validate new transactions and add to the ever-increasing blockchain -- receive for each new 'win' from 12.5 to 6.25 on May 12.
Back in 2009, miners got 50 tokens for each transaction they confirmed by solving complicated mathematical puzzles.
Bitcoin prices have typically risen in the weeks following the previous halving in 2012 and 2016, and could press higher as gold prices extended their gains to a two-week high of $1,717.52 per ounce.
The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, is also on the back foot, falling 0.16% to 99.727 as benchmark 2-year bond yields hold near a record low of 0.129% and Fed Funds futures contracts begin to price in negative U.S. interest rates for the first time in history.