Thriller Rundown - S3EP10: The Certainty of Bitcoin
|Car||Oct 7, 2019|
One of Germany’s biggest bank predicts bitcoin will reach $90,000 due to the halvening based on a stock to flow model that measures the hardness of a money.
“The stock-to-flow approach originating in commodity-market analysis serves to quantify the ‘hardness’ of an asset. Applied to Bitcoin, an unusually strong correlation emerges between the market value of this cryptocurrency and the ratio between existing stockpiles of Bitcoin (‘stock’) and new supply (‘flow’),” they say.
“Satoshi’s ‘stroke of genius’ was to decouple supply from price and from mining efforts (in Bitcoin’s case: computing power). It is worth noting that this ‘difficulty adjustment’ was absent in the case of all Bitcoin’s predecessors, e.g. Bit Gold…
Historically, the Bitcoin Halving has proven to be an important catalyst that propels Bitcoin into a new Bull Market.
In fact, Bitcoin tends to begin its new bull trend at least a year before its Halving.
Bitcoin Halving #1 — November 2012
Bitcoin Halving #2 — July 2016
Bitcoin Halving #3 — May 2020
1. Bitcoin has rallied 12,000%-13,300% in each of its Halvings to date
The first Bitcoin Halving spurred 13,378% growth in Bitcoin’s price whereas the second Bitcoin Halving spurred a 12,160% rally.
A 12,160% rally from Bitcoin’s mid-December 2018 bear market bottom of $3,150 would result in a ~$385,000 Bitcoin.
By the same token a 13,378% rally would lead to a ~$425,000 Bitcoin.
A $385,000 Bitcoin is very interesting because that would mean that Bitcoin’s Market Cap (i.e. $189 billion as of this writing) will have eclipsed the current Market Cap of Gold (i.e. $7.8 trillion).
Bitcoin Halvings #1 and #2 — A Detailed Breakdown
A new Market Cycle high tends to be made just before the Halving but it doesn’t eclipse the old All-Time High
Since mid-December 2018, Bitcoin rallied over 340% which closely resembles the 383% rally that Bitcoin experienced leading up to its second Halving.
If Bitcoin were to rally 383% like it did prior to Halving #2, it would reach a new Market Cycle high of ~$15,000 which is higher than the current Market Cycle local top of $13,900 as of this writing.
This turn of events would satisfy the historical tendencies of setting a new Market Cycle prior to the Halving but not a new All-Time High.
This in turn would also satisfy another key tendency: if Bitcoin rallies less pre-Halving, it will rally more post-Halving (and for a longer period of time).
Should this tendency play out once again, this would mean that Bitcoin would have a higher likelihood of rallying over 13,000% compared to the 12,000% rally from Halving #2.
On the other hand however, if Bitcoin were to rally similarly to its 663% uptrend prior to Halving #1, that would mean that Bitcoin would reach a price point of almost $24,000 prior to Halving #3.
Of course, this would lead to a new All-Time High prior to the third Halving which is something that goes against the aforementioned historical tendency.
It is for this reason that Bitcoin’s price action may continue to closely resemble its price action prior to Halving #2.
Should this be the case, it would take Bitcoin a longer time to manage its typical post-Halving growth (after all, it took Bitcoin over 500 days post-Halving #2 to manage an over 12,000% rally to new ATHs).
If Bitcoin’s post-Halving #3 growth resembles Bitcoin’s post-Halving #2 growth, then Bitcoin may see a new All-Time High over 500 days after the Halving (i.e. by Quarter 4, 2021).
3. After a new Market Cycle high is set, a retrace will occur prior to the Halving
A retrace may very well occur prior to the Halving which would figure as a financial opportunity for both traders and investors alike.
4. New All-Time High in Bitcoin’s price will occur after the Halving
Historically, Bitcoin has set a new All-Time High after every Halving.
Whatever All-Time High price Bitcoin reaches, this new record is most likely to take place many months after the Halving.
5 Good Minutes
Where is Bitcoin Price Heading?
The Hard Truth
Paypal Exits Libra – Mastercard and Visa May Follow
The Libra Association’s head of policy and communications, Dante Disparte, reportedly told media outlet the Verge:
This journey to build a generational payment network like the Libra project is not an easy path. We recognize that change is hard, and that each organization that started this journey will have to make its own assessment of risks and rewards of being committed to seeing through the change that Libra promises.
The representative went on to affirm that the upcoming Libra council meeting is still set for October 14 in Geneva.
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