History repeats itself! Bitcoin halving effect, ETF and Lightning Network drive recent surge

Bitcoin has been brutally beaten up for much of 2019 so far, but this past week provided a much-needed respite for the market by posting its biggest one-day gain of the year, with prices rising more than $350 on Friday.

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Nigel Green, CEO of independent financial advisory firm deVere Group, said the move could be the start of a "massive surge" for Bitcoin, with three main factors behind the recent rise, but it was too early for investors to start celebrating.

deVere CEO: History shows Bitcoin halving drives “surge”

The crypto market has fallen into deep despair as Bitcoin and other major cryptocurrencies have struggled to find a price bottom for a long time after falling below the $6,000 support level. Investors have suffered losses, and the pressure on the industry has caused many companies to start laying off employees as interests and capital flee the market.

However, bitcoin’s price woes may be coming to an end, and if history repeats itself, bitcoin’s next halving event could result in “a pretty big bitcoin pump,” said Nigel Green, CEO of deVere Group.

Green noted that the upcoming “halving” in 2020, which reduces the block reward miners receive for confirming transactions by 50%, could be the catalyst that ends the current cryptocurrency bear market.

“Bitcoin mining code halves block rewards approximately every four years, with the next one happening in May 2020. When a halving occurs, miners receive 50% less in Bitcoin rewards. History shows that Bitcoin prices typically surge in response to halving events,” Green explained.

Litecoin (LTC), which is set to halve this year, was the first altcoin to break through rising resistance and helped lead the recent rise in the cryptocurrency market, with LTC even seeing a single-day gain of more than 30% last week, which supports Green's statement. However, Green said there are two other factors behind Bitcoin's recent rise.

ETFs and Lightning Network are two other key factors driving Bitcoin’s recent rally

Green also believes that recent comments from SEC Commissioner Robert J. Jackson Jr., who said a Bitcoin ETF will “eventually” be approved, could restore investor confidence in the largest cryptocurrency by market cap.

Additionally, Green called attention to the latest developments in the second-layer protocol Lightning Network (LN), which he said will “dramatically improve Bitcoin’s scalability issues, moving it toward mass adoption.” According to deVere, the Lightning Network, potential ETF approvals, and the upcoming halving event are “three key drivers” behind Bitcoin’s recent rally.

But before investors start celebrating the end of the bear market, Green warned that the price of the cryptocurrency can only reach the top of its trading range and that “investors shouldn’t pop the champagne just yet.”