Bitcoin will return to all-time highs within the next 12 to 18 months say industry experts.

Luno CEO Marcus Swanepoel predicts that the price of Bitcoin will return to all-time highs within the next 12 to 18 months based on a recent poll of its users and following the cryptocurrency’s 2020 block reward halving.

According to the poll, most Luno users (75%) expect the Bitcoin price to be "higher" or "much higher" by the end of 2020. Only less than 5% plan to sell theirs over the next six months, while over 90% expect to buy more, increase trading or hold on to theirs over the same period of time.

Swanepoel made the prediction before Bitcoin had the quadrennial cutting into two of its supply - this time from 12.5 coins to 6.25 coins - on 11 May 2020, leaving only 900 Bitcoin to be produced per day for another four years (previously 1800) and twice as hard for miners to produce.

“I believe we’re currently at the beginning of a long upward trend, one that, considering the broader economic environment, is set to experience increased volatility, especially in the next few weeks. Nevertheless, with the halving just around the corner, and with some patience, we will see that same sharp increase common with previous halvings, even if it will take a bit longer than usual to get there,” said Swanepoel.

Currently at about US$8,750, Bitcoin rose from around US$11 to $1,100 a year after the 2012 halving, while the second halving in 2016 saw its price fly from around US$600 - US$700 to touch US$20,000 in 2017.

In theory a reduced supply and a constant demand should drive prices higher over time, much like the two previous halvings, but nothing is fixed or certain.

This time is different as a supposed drop in Bitcoin’s inflation rate to 1.73% from current 3.93% - lower than gold’s and global inflation rate of about 3.56% according to Statista.com - could have a significant impact.

Safe haven

According to the statistics platform countries with unstable currencies like South Africa have seen Bitcoin as a safe haven and strong source of stored value.

Additionally, with governments printing money all over the world, inflation is likely to be higher than in the past, while the Covid-19 situation may reduce the purchasing power of fiat currency and prompt many to consider Bitcoin.

“With the ongoing restrictions in place to combat the COVID-19 pandemic, we have moved to an entirely digital approach, focusing on digital events and online content,” says Owenize Odia, Luno’s Country Manager in Nigeria, citing their Luno Learning Portal as a resource point for Nigerians, especially those seeking to take their first steps with digital assets.

“We have always maintained that cryptocurrencies will find an important audience in Africa due to the combination of factors at play on the continent. Africans should no longer have to pay extortionate exchange rates, accept national devaluation or lose out when they simply transfer money between individuals or entities. Access to a more inclusive financial system enabled by cryptocurrencies will enable people everywhere to think of new and better ways of exchanging value and we are planning to play a big role in making this happen in Africa and across the world.”

The global cryptocurrency company, with offices in London, Singapore and Cape Town, is currently ranked in 11th place in the CryptoCompare Exchange Benchmark which grades global crypto exchanges on the basis of their risk assessment, transparency and accountability.