To make money on a trade, the asset you’re trading has to move. And like President Kennedy said in a 1963 speech, “a rising tide floats all boats.”
There are a couple of different forces that move cryptocurrencies so people like us can trade them.
Some of them are short-term and unpredictable, which means you’ve got to stay alert and nimble. Others forces, like the “currency waves” I track, tend to move the smallest coins – the “microcurrencies” – in a big way. I’m always watching for these – and I mean always.
But then there are predictable “landmark” events that we can see coming from miles away. See, the best crypto teams out there publish “roadmaps” when they begin, and these contain things like planned upgrades, supply tweaks, and so on, that can have a direct impact on the token price, both in the short- and long-term. The Ethereum Merge and Cardano’s “Vasil” update come to mind.
One of the biggest, most famous of these landmark events is the Bitcoin “halvening.” I’ve got a beautiful Bitcoin chart to show you in a second that proves these events are massive for crypto in general and Bitcoin in particular.
In fact, Bitcoin has gone on to do extraordinary things in and around these events – I’ll show you what happens, and what’s likely to happen next time…
How to Think About the Halvening
Bitcoin was designed to have a finite supply – around BTC 21 million. That’s the baked-in scarcity; that’s all the Bitcoin there will ever be.
To date, approximately 18.5 million coins have been mined, which leaves 2.5 million more to be discovered (though I’ll explain in a minute that, in reality, this 18.5 million number is on the high side).
The last Bitcoin is expected to be mined in the year 2140.
You read that right – the mid-22nd century. It took just 13 years to mine the first 88% of available coins… and it’s expected to take another 118 years to mine the remaining 12%.
Here’s why: Bitcoin miners, who run the machines that solve the math “puzzle” problems that create Bitcoin and validate transactions, get a reward, in Bitcoin, for their mining efforts.
Each puzzle that is solved creates a block that is added to another block, creating a blockchain.
The genesis of the blockchain was block number zero back in 2009, and the reward for miners who solved the complex puzzle at that time was an eye-watering 50 Bitcoins per block.
Now, halving events are programmed to occur every 210,000 blocks and takes roughly four years. Mining and halving are expected to continue until the last of the 21 million Bitcoins are mined.
There have been three “halvenings” in Bitcoin’s short history. Right now, a miner gets BTC 6.25 for every block they mine.
So, it follows that the next halving will see the reward slashed to BTC 3.125 per block. The next will see that drop to BTC 1.562… then BTC 0.781 and so on.
You can see, that reward is pre-destined to shrink, by half, at set intervals. Which means we can see it, we can predict it, and we can get ready for it.
Why should we even care about increasingly tougher and tougher math problems? Well, simple economics. Supply and demand. Shrinking supply and growing demand mean higher prices, and Bitcoin is no exception.
Look at this chart from TradingView…
You can see it plain as day, each halving event is preceded by bullish buying… and followed by even more buying.
The buying is so strong, in fact, that within about 18 months of each halving, Bitcoin hits a fresh all-time high. And, as Bitcoin gets even more scarce, even if demand is flat it’ll still outpace supply.
Now, as I mentioned earlier, that BTC 18.5 million figure is a little misleading. Yes, that’s all the Bitcoin we have today, but research shows that as much as BTC 3.79 million is “lost” or “unrecoverable.” That’s around 20% of all Bitcoin, doomed to stay locked away in wallets pretty much forever, unclaimed.
There’s Satoshi Nakamoto’s big BTC stash, which hasn’t been touched, there’s that poor guy in Wales who’s still trying to get permission to dig up his local landfill to try and find his Bitcoin hard drive, there are people who die and take their passwords with them… There are countless reasons why these Bitcoins are lost, and most of them are likely to stay that way.
The point is, Bitcoin supply is going to hit a wall much sooner than anyone realizes, and the next halvening, which will be less than two years from today, will have an even bigger impact on price than the last events.
But don’t think for a second that I’m waiting two years to make a move. Like I said earlier, the microcurrencies offer much more of an opportunity for big, windfall profits from the currency waves that hit them regularly. If the Bitcoin halving is the birthday cake, these waves are my everyday bread and butter – and the eating’s good. They’ve given my readers a shot at some outstanding profit opportunities in one of the toughest crypto markets we’ve ever seen.