Dear Bitcoiners,
It’s Halvening 🙌 ! The Bitcoin Halving will take place in approximately 12 hours! Bitcoin supply issuance will drop from 6.25 BTC to 3.125 per block, reducing from 900 to 450 coins a day. This will lower Bitcoin’s inflation rate from about 1.7% to roughly 0.8%, which is below that of Gold, estimated between 1% and 1.5%. This truly is a historic moment for Bitcoin!
Bitcoin’s invention, digital scarcity, is propelled forward by each Halving, algorithmically reducing new supply issuance. In the early days, the market was flooded with new supply and Bitcoin’s yearly inflation rate was above 35%; it then gradually decreased with each Halving. In the first 15 years of Bitcoin’s existence, 19.7 million coins have been added to the circulating supply. We’ll look back at this as the inception phase.
Today, I’ve prepared an insightful short clip about the Halving dynamic, presented in a visually attractive and engaging manner, which I hope you’ll find valuable!
Video: The Halving Impact
Additional Key Insights
Supply Reduction: The 655k reduction, mentioned in the video, accounts for 11.5% of the available supply for trade.
Comparison with Spot ETF Demand: The 655k reduction unfolds over a 4-year period. To put this in perspective, let’s compare it to the ETFs, which scooped up 200k coins in Q1 of 2024 and drove the price to new ATHs. The 655k reduction over 4-years results in ~40k coins per quarter. That contrasts with the 200k from ETFs. But there’s a big difference: Unlike the fluctuating ETF demand, which we saw fading in Q2, the impact of the Halving is consistent and permanent.
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Market Outlook
Recently, amid news of the war and a worsening macro environment, Bitcoin’s price took a downturn. However, the support level has not yet been breached, and this may just be a reset of the Short-Term Holder (STH) cost basis. While the hype around the Halving has pushed Bitcoin back up, I recommend keeping a close eye on the following charts:
Bitcoin Support Levels: Mid Level Range Low
Bitcoin Key Levels: Reset of STH cost basis
I hope you found this issue insightful. As always, let me know what you think in the comments. Your input is always valued! 🧡
Happy Halving! 👊
-Root
The video was very good, in particular separating out a)lost, b)inactive, and c)STH btc. Also, thank you for keeping the temperature down by highlighting the chart, Bitcoin Support Levels: Mid Level Range Low, which shows things can get a lot worse before they get better.
✨✨💪🏾