If the rock you live under is big enough to shut out the Wall Street moguls, the crypto enthusiasts, the long-term hodlers, the current crop of college kids, Twitter, TikTok, YouTube, Instagram, your grandmother, your sister, and your mom, then congratulations, you missed the most recent news about Bitcoin creating new All-Time Highs as the Halving Event gets closer and closer. However, it would be likely that Medium would be shut out as well, making the reading of this article nearly impossible. Let’s briefly discuss what is happening with the world’s 13th largest currency.
The Halving or the Halvening:
For the unaware, the Halving is a pre-destined event that happens approximately every four years. Bitcoin's blockchain requires miners to secure the network and solve mathematical equations before releasing new blocks onto the chain. These new blocks happen nearly every 10 minutes. With a new block comes a reward. In the beginning, the reward was 50 Bitcoins per block. That comes to about $3.65M today for 10 minutes of work. Not too shabby. However, the reward is not 50 at the moment; it is 6.25 Bitcoin per block, and the reason for this is that the previous halvings have reduced the block reward. First 50, then 25, then 12.5, and now 6.25. The next halving has a predicted date of April 20th, 2024 — better known in some circles as 420. DYOR on the meaning of 420. This article is neither the time nor the place. On or near 4-20, the Bitcoin halving will take place, and the block reward will be reduced to 3.125, down from 6.25.
Another way to appreciate the event is to think about it this way. If there were no buyers for Bitcoin and a stalemate was reached between buyers and sellers, every new Bitcoin added to the network that was in a sell-only mode would require the seller to reach over party lines and sell to the highest bidder on the buying side. With approximately 144 blocks generated every day and a current reward of 900 Bitcoins per 24-hour period, about $65M in Bitcoin is added to the network — EVERY DAY. If equilibrium is reached, that means buyers are willing to digest $65M worth of Bitcoin every day just to keep the price exactly the same as it was yesterday.
Imagine that the $65M hunger for buyers continues, but only half of the freshly minted Bitcoins make their way to the market (post-halving). That is what is potentially considered a Supply Shock. After the halving, only 450 Bitcoins will be produced on average daily instead of the current 900. This is one reason why, after each previous halving, a new ATH was reached. Speaking of ATHs…
Historic New ATH:
Bitstamp has some of the longest trading history concerning Bitcoin. With history reaching as far back as 2011, it allows us to see every halving: 2012, 2016, and 2020. Using their current price data on a Weekly resolution, we can see that last week produced a new ATH of $70,184. This means it took Bitcoin 121 Weeks, or 847 Days, to best it’s previous ATH of $69,000, by exactly $1184, or 1.72%. However, that may only be the start. The current weekly high, as of Tuesday, March 12, 2024, around lunchtime on the East Coast of America, is $73,054, and that is an increase of $2870, or 4.09%, in less than two days.
To give some background, when the $64,895 ATH was set in April of 2021, Bitcoin experienced 7 Weeks that all resulted in new ATHs over each other before finally reaching $64,895 and proceeding to correct over 55% in the following 10 weeks. Not to be outdone, Bitcoin did eventually eclipse $64,895 to give us a true cycle ATH of the more well-known and referred-to $69K. To sum it all up, from the stroke of midnight on May 11th, 2020 (the previous Bitcoin halving) to the cycle high ATH of $69,000, Bitcoin moved from $8741 to $69,000, over 78 Weeks or 546 Days. That is an overall increase of $60,259 or 689.39%. Of course, history cannot exactly predict the future but it helps to have some insight before you say “That could never happen.”
The ETFs and their Part in History:
Contrary to popular belief or the gurus on Twitter and Instagram, I don’t subscribe to the notion that the Bitcoin ETFs and the current ATH share the same place at the dinner table. The Halving was going to happen whether Bitcoin had new vehicles for investors or not, just as the previous three halvings proved. Although it can no longer be proven, Bitcoin would have likely gone on to make new ATHs either before or after the Halving Event, with or without BlackRock and Grayscale and the other eight firms making spot Bitcoin ETFs available. Now, I am not suggesting the ETFs didn’t help get the word out about Bitcoin. All the previous haters that were telling you Bitcoin was a joke or a scam are the same CEOs and board members of the hedge funds and firms behind the ETFs. This is not much different from miners back in the Gold Rush posing as good Samaritans and warning prospective miners that a particular area had no gold in it. Obviously, this was so they could keep that area to themselves and steal all the riches from those who were seeking fortune and freedom for themselves.
Now, before we get off track and rant about the bigger issues of “Us vs. Them”, let’s circle back to the Spot Bitcoin ETFs. There are ten ETFs at the moment, but only five are worth mentioning. From the highest MCAP to the lowest, we have: Grayscale, BlackRock, Fidelity, Ark, and Bitwise. These are the only spot Bitcoin ETFs with a Market Cap over $1B, the highest being Grayscale at $44.49B, and the lowest of these Top 5 sitting at $1.5B. These ETFs make Bitcoin exposure legal and attainable for millions of people in America, one of the least crypto-friendly places on the planet. In that regard, the spot ETFs are a good thing. Another interesting takeaway from the now-mainstream Bitcoin spot ETFs is the data analytics, specifically the daily volume. Since January 2024, Grayscale has had multiple $3B+ weeks. The most notable was last week, during the new Bitcoin ATH. Last week, according to the $GBTC TradingView volume data, 155.235 million shares moved with an average price of $58.095 per share. That comes to a weekly total volume of over $9B for the last week. Just for comparison, Coinbase in the same week had a reported volume of 32,333 Bitcoin at an average price of $70,028, which comes to a little over $2.26B.
Regardless of whether you are a 2009 OG, a 2017 Veteran, a 2021 Rookie, or an absolutely brand new, sweet, innocent, curious dreamer, one thing is for certain: Bitcoin is making some waves, and people are starting to pay attention. Through all the blood, sweat, and tears since November of 2021, 2024 has already proven to be better than the previous two full years combined. The confluence of Bitcoin ETFs, a record-breaking all-time high, and renewed interest from institutional players sets the stage for what many anticipate to be the start of the next bull run in the crypto market. As the narrative around cryptocurrencies evolves, investors are eagerly watching for signs of sustained upward momentum. The countdown to the Halving will be a prevalent talking point over the next several weeks. Position yourself accordingly, and may the odds ever be in your favor.
Written by,
Chingas X
