Bitcoin has halved. Now What?
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You wait.
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Bitcoin's halving immediately impacts miners, and their paychecks are cut in half. But they knew this going into mining.
"We see the halving making a much larger impact on miners than the bitcoin price. Miners will have to adjust their operations to accommodate the smaller rewards."
?Mick Roche, senior trader, Zodia Markets
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For those of us who invest in Bitcoin, we wait for the halving's effect to ripple through the ecosystem.
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"Although a small sample size, the past years in which Bitcoin had a halving event, the Jan to Dec performance averaged about 200%. This would imply an end-of-year price for BTC of about $91,500."??
Greg Magadini CFA, Director of Derivatives at Amberdata
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Why do we wait?
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We wait because, historically (the previous three halvings), Bitcoin's price has increased in weeks and months following the halving.
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Bitcoin, and the cryptoverse, have never been a get-rich-quick scheme. Although Bitcoin has created some millionaires and (a few) billionaires, that was yesterday's news and is not prone to happen today.
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It doesn't mean Bitcoin and the cryptoverse are worthless investments. It means they have matured into long-term investment vehicles—like every other investment opportunity.
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That being said, short-trades will continue to profit if you have the right strategy, but the moonshots to millionaires are fading memories.
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Please take a look at last month's Coin Gecko chart of Bitcoin. There were enough dips to constitute an exercise guru's workout. (Dips are a form of exercise).
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What does the chart tell you?
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It tells you several things.
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Volatility
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Bitcoin is a highly volatile, highly risk-related investment. Its massive gains potential continues to be a drawing card.
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However, it is typically the first to be dumped when uncertainty arises.
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Here are some of the scary numbers.
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$255 million worth of liquidations
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$500 million worth of liquidations
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$700 million worth of long contracts liquidated
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$1.2 trillion—Bitcoin's reduced market cap
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12% of Bitcoin value is lost
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17% of Bitcoin value from all-time $74k high is lost
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On Friday, April 19, 2024, hours before the anticipated halving and news of Israel's attack on Iran, Bitcoin was below $60k ($59,698).
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Markus Thielen, founder of 10X Research, said,
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"Our growing concern is that risk assets (stocks and crypto) are teetering on the edge of a significant price correction. The primary trigger is the unexpected and persistent inflation. With the bond market now projecting less than three cuts and 10-year Treasury Yields surpassing 4.50%, we may have arrived at a crucial tipping point for risk assets."
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News driven
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·?????? Red Sea crisis Yemen's attack on maritime
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·?????? Baltimore bridge collapse
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·?????? The Fattacked Open Market Committee (FOMC)
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·?????? Troubling economic news
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·?????? Iran attack Israel
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·?????? Israel counters
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These are a few headlines that impacted markets over the past month, showing the volatility of geopolitical events on investment decisions.
领英推荐
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Bitcoin dropped below $60k following the news of Israel's Iran attack, marking the first time it had fallen below $60k since February 2024. However, within 10 minutes, it recovered to $61.8k.
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Sell the news
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A JP Morgan report suggests a reversed-halving price increase may have taken place.
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It cites the 43% year-to-date gain of Bitcoin and the 130% six-month gain.
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The report has merit, and time will tell if it is accurate, but the halving has become a sell-the-news event. This is due, in part, to the massive gains following the previous halving.
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Goldman Sachs says the halving is no guarantee of the price increase.
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Bitcoin billionaire Arthur Hayes is concerned about poor liquidity. In a recent blog, it is posted that fears of the halving will "add propellant to a raging firesale of crypto assets."
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Bitcoin: digital gold ?
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The best news from Coin Gecko's Bitcoin chart is that Bitcoin is digital gold.
Despite the volatility, it maintains over 50% of cryptocurrency market share, currently holding around 51.5%.
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Since its inception, Bitcoin has overcome every hurdle. On February 29, 2024, it crossed the $60k mark and, except for a 10-minute hiccup on April 19, 2024, lost that resistance level.
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According to LMAX Digital, Bitcoin is in great shape, "with fresh record highs on the horizon," as long as it holds above $59k.
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Here is why I agree with their positive outlook.
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Approximately 19 million of Bitcoin's 21 million lifetime supplies have been mined. This means it will take about 116 years to mine the remaining (approximately) two million coins.
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Of the 19 million mined coins, about 75% are held for more than 155 days (long-term). In other words, those who buy Bitcoin hold onto It, increasing its value.
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This increases the value of the approximately five million Bitcoins in circulation and the (approximately) two million remaining coins.
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So, buying today provides value that, like gold, gives me future bargaining power.
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An exciting story recently emerged about a "Satoshi era" miner who moved 50 Bitcoins that had been held for 14 years. At the current price, the coins are worth over $3 million.
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How's that for bargaining power!
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Why it matters
Large Bitcoin whales bought 19,760 BTC worth (over $1.2B as Bitcoin dipped below $60k.) early Friday following Israel's attack on Iran.
On Friday, April 19, 2024, IntoTheBlock posted on X,
"Bitcoin whales may have finally started buying the dip.IntoTheBlock?said?in an X Historically, accumulations by these addresses have often preceded Bitcoin price rises."
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Beyond the stories painted by the Bitcoin chart, its place at the global financial table is secure.
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Blackrock's CEO Larry Fink says, "IBIT [Blockrock's Bitcoin spot Exchange Traded Funds—ETF] is the fastest-growing ETF in history."
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Bitcoin has surpassed the open interest of all other exchanges on CME (Chicago Mercantile Exchange) futures contracts, reaching over 25% on an annualized basis—almost five times the U.S. risk-free rates. ?
(Basis Trading: The trading strategies built around the difference between the spot price of a commodity and the price of a futures contract for that same commodity.)
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Bitcoin's spot ETF is expanding to Hong Kong. According to a Reuter report, four entities in China have submitted applications to launch the ETF. Since Hong Kong seeks to become the Bitcoin hub of the East, the applications will likely be approved.
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Fellow crypto-writer Anthony Pompliano says,
"So my big takeaway is that the actual halving is historically a sell-the-news event. The price of Bitcoin does not immediately take off higher. Instead, it takes a few weeks or months to see the supply change impact the market."
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How it impacts everyday people
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I am committed to the cryptoverse, which offers a path to help you change—possibly find financial freedom.
Although it is not the end-all, cure-all, it is a simple investment tool that everyday people can utilize.
Education is critical, and intelligent investing is paramount for everyday people to navigate these bumpy roads.
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The thought of change often scares everyday people back into old, comfortable living patterns. There is nothing comfortable about being uncomfortable.
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However, IF change is to occur, you must weigh the length of your uncomfortableness against the lifetime of enjoyment.
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In other words, is it worth the temporary discomfort to avoid a lifetime of complacency and lack?
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If your answer is YES, you can follow along and learn how to make a change by being educated in the cryptoverse.
Investing in any of the various segments of the cryptoverse (Currency, DeFi, gaming, NFT, Metaverse, or Web3) can provide you the opportunity for financial freedom, but it takes a plan.
Disclaimer: I am not a financial planner, and therefore do not offer financial advice. I am an avid student of the cryptoverse who is willing to make the things I learn available to everyday people willing to take a chance, change, and explore your financial freedom in the cryptoverse.