The third halving event in Bitcoin’s history is approaching. A halving in Bitcoin is when the number of new bitcoin created roughly every ten minutes is cut in half. This change in the Bitcoin issuance rate is scheduled to take place every 210,000 blocks (around every four years).
After hitting a 2020 high of over $10K in mid-February, the bitcoin price was lower than $5K a month later. Since then its been an uphill climb, the price of bitcoin has recovered somewhat to around $7.8K. Since ‘Black Thursday’ (March 12), bitcoin prices have gained 103% since then rising from $3.8K to $7.8K per bitcoin.
Miners
Hash Rate increasing 12 Days out…
Miners, miners, miners…we have to remember the halving cleanses the removal of inefficient miners. We have to understand why this is important and related to bitcoin price. First the bitcoin rewards get allocated to the very efficient miners — the people that have deployed correctly relative to low [cost] electricity. Ultimately we want bitcoin in the hands of these types of miners because they do not have to sell as much bitcoin. Most if not all miners will operate at a loss after the halving, which creates even more sell pressure because everything they are mining is going to get sold. The very efficient miners have better margins, they don’t have to sell as much bitcoin, because they have prepared for this adjustment. This could take 2-4 months for inefficient miners to get removed from the network.
The question to ask is. “Have the miners priced in the halving?” This is the most important question when predicating price going into the halving. Which is also related to the downward bitcoin price movement?
Currency Wars
Money Printer go burrrr…
Adjusting the money supply in line with demand is one of the primary functions of FED and central banks. The most important rule of the game is to avoid a deflationary environment, most people expect tomorrow’s dollar to be very stable. We know Fiat currencies tend to be inflationary by their nature.
The importance of dynamic money supply was learned the hard way in 1929 when the FED failed to tackle a deflationary dollar. As the dollar deflated, the purchasing power of each dollar increased. People chose to save rather than spend. The velocity of money dropped, the economy contracted and the worst recession of the century followed.
It is safe to acknowledge that fiat currencies are great for day-to-day transactions for now. They are fine for short term savings for now. They are convenient for rainy-day funds…not anymore they have become terrible as savings instruments.
Remember Bitcoin is not a fiat currency and it is certainly not responsible for keeping liquidity within an economy. Bitcoin is a disinflationary asset with a fixed and transparent supply schedule. Don’t save in fiat. Save in Bitcoin.
Bullish Factors going into the halving
The drop…to 6 bitcoin is far more vital this halving than most people understand.
Consensus 2020, Ethereal 2020, Virtual Blockchain Week.
More Stimulus Checks? Possibly and if so more will enter Bitcoin.
Unforeseen Major FinTech Announcements.
Buy-side pressure overtakes Sell-side pressure.
Bearish Factors going into the halving
Covid-19, Lock-down.
Massive layoffs, Unemployment, No excess fiat.
Signs of a Great Depression in play?
The unexpectedness of 2020? We do not know what is around the corner economically especially this year.
Bitcoin
We need to discuss PlanB because he is releasing a variation on the Bitcoin stock-to-flow model. This new model, known as the “S2FX”, model. PlanB’s S2FX model combines the valuation of Bitcoin with assets such as gold and silver.
PlanB has come to the conclusion that bitcoin as an asset is going through a series of “phase transitions”.
These BTC narratives seem very…

Ver todos los episodios