April 2024 - The Halving...

[Itsallaguess]

‎
An interesting article below discussing the four-year Bitcoin-generation halving cycle, with the next halving-episode occurring in April 2024.

This four-year cycle halves the number of Bitcoins given as a reward to successful miners -

The million-dollar question for crypto investors is whether crypto prices will go up after the next bitcoin halving.

“There are a lot of factors that could come together at the same time next year to create a perfect storm,” Simon Peters from the investment platform eToro said. “Central banks have been raising interest rates to bring inflation down to target levels. But in the future they may not be as tight with monetary policy, which could be positive for asset prices, crypto included.”

Not everyone is convinced, however. “I wouldn’t suggest anyone counts their chickens before they’re hatched,” Laith Khalaf from the investment platform AJ Bell said.

“The halving only affects new supply rather than overall supply, so while fewer new bitcoins will be mined, the stock of existing bitcoins out there remains. It’s not as if the halving comes out of the blue either and so should largely be reflected in current prices.”

Experts also point out that the macroeconomic conditions are different from when previous halvings happened. In 2020 the pandemic meant that boredom and spare cash that couldn’t be spent on travel or socialising were fuelling investment in cryptocurrencies.

Now higher interest rates mean that household budgets are increasingly squeezed and people have less money to spend on speculative investments.

“Is there any point where crypto enthusiasts don’t predict a bull market and stratospheric price rises?” said Ben Yearsley from Shore Financial Planning. “Crypto has previously been around in a zero interest rate environment where there was no cost to holding assets that did not yield anything. Today you can get nearly 6 per cent interest on cash. Different environments lead to different outcomes.”

Concerns also remain about the long-term use of bitcoin. A survey of crypto users by Deutsche Bank found that the proportion of respondents who viewed cryptocurrency as a fad that will fade had doubled from 9 per cent in December 2021 to 18 per cent in September.

“Bitcoin remains pretty economically inert in the real economy, and that suggests the entire project may be doomed to failure. It wouldn’t hugely surprise me if bitcoin hit $50,000 or $1 next year,” Khalaf said.

https://archive.ph/QRw85

I suspect that Crypto-enthusiasts tend to seek to overplay the price-related importance of such highly-telegraphed technical cycles such as this, and that in the past, they've relied on unrelated external macro events that have sometimes aligned with these post-halving periods, and which have subsequently gone on to have much more influence on the price of Bitcoin that these four-yearly halving cycles themselves.

Cheers,

Itsallaguess

[AsleepInYorkshire]

‎
An interesting article below discussing the four-year Bitcoin-generation halving cycle, with the next halving-episode occurring in April 2024.
Itsallaguess

Could I please gently ask that you stop assuming and suggesting that Itsallaguess, and perhaps simply allow others to decide if that's the case or not, without the constant need to suggest it?

Thank you

AiY(D)

[Tedx]

Ooooh....burn

[yieldhog]

I've never bought any crypto assets but have followed the ups and downs of the market with interest. For anyone involved in investment it's hard not to notice crypto currencies with all the publicity surrounding them.
The question is should I put a little of my speculative portfolio into crypto now or is it too late?

What really prompted me to consider this now is the fact that Goldman and other brokers are looking to establish crypto ETFs which might prove a catalyst for more significant money flows into crypto assets.

My concerns are mainly liquidity and what happens if trading peters out. If I invest in gold bullion it will always have an intrinsic value. If I invest in company shares I will always be able to get a share certificate if trading in the stock ceases, even though that may become worthless in the event of bankruptcy. What would I get if a crypto currency ceased trading, some coins maybe?

Sensible comments only please.

Y

[stevensfo]

I've never bought any crypto assets but have followed the ups and downs of the market with interest. For anyone involved in investment it's hard not to notice crypto currencies with all the publicity surrounding them.
The question is should I put a little of my speculative portfolio into crypto now or is it too late?

What really prompted me to consider this now is the fact that Goldman and other brokers are looking to establish crypto ETFs which might prove a catalyst for more significant money flows into crypto assets.

My concerns are mainly liquidity and what happens if trading peters out. If I invest in gold bullion it will always have an intrinsic value. If I invest in company shares I will always be able to get a share certificate if trading in the stock ceases, even though that may become worthless in the event of bankruptcy. What would I get if a crypto currency ceased trading, some coins maybe?

Sensible comments only please.

Y

Sensible comments? Really?

I think that most of the answers are in the other threads on this board. I have a very small amount in Bitcoin via my Revolut card, but just as a joke, really. When Bitcoin and Ethereum are totally accepted as alternative currencies and the volatility subsides, then I may look again. But until then, no way!

People tell me that you can buy stuff in Switzerland with Crypto. Yes, but Crypto goes up and down like shares and gold, so why not use them?

Fortunately this hasn't turned into another dotcom boom. It may fizzle out in a few years. Who knows?


Steve

[Urbandreamer]

I've never bought any crypto assets but have followed the ups and downs of the market with interest. For anyone involved in investment it's hard not to notice crypto currencies with all the publicity surrounding them.
The question is should I put a little of my speculative portfolio into crypto now or is it too late?

What really prompted me to consider this now is the fact that Goldman and other brokers are looking to establish crypto ETFs which might prove a catalyst for more significant money flows into crypto assets.

My concerns are mainly liquidity and what happens if trading peters out. If I invest in gold bullion it will always have an intrinsic value. If I invest in company shares I will always be able to get a share certificate if trading in the stock ceases, even though that may become worthless in the event of bankruptcy. What would I get if a crypto currency ceased trading, some coins maybe?

Sensible comments only please.

Y

I own a tiny amount of BTC. I keep asking if I own enough. So how much would be enough? Well I have two thoughts.

1) No more than I hold cash in my current account.
2) No more than 1% of my portfolio.

I currently own less than either.

Is it too late? Personally I don't think so.

So how to go about it? You need to start by asking why you want to get involved and what your values are.

Everyone is use to bank accounts and many on TLF to brokering nominee accounts. Arguably that is not the "correct" way to go about crypto, though you can do so if you wish. It's actually how I started. I bought some BTC near the top of the last bull run in my PayPal account. Unfortunately you can't withdraw the BTC from them.

You can open an account with an exchange, deposit funds and buy through them. It's then up to you if you leave it on the exchange, in which case you are a creditor of the exchange, or you can remove it from the exchange and keep it on a crypto wallet. I currently have £60 worth of BTC on a functioning exchange, handy as I can spend it as £'s using a VISA debit card. However I have a policy of withdrawing BTC and keeping it myself. I am one of many FTX undischarged creditors.

Taxes!

Sorry, but crypto is subject to CGT. I seriously doubt that the government will change the rules to allow bitcoin etf's in an ISA or SIPP. Taxes or rather accounting and paying them, may actually be the killer reason to avoid crypto. Of course they are the purview of the government.

You need to track the price that you pay and the price at which you "sell" your crypto.

Yes this does mean that buying some shirts may land you with a CGT liability. Yes I did spend BTC, via VISA, buying shirts at the local Matalan. The vendor received £'s.
Sure, currently it is unlikely to lead to a tax bill, due to the CGT personal allowance. But that allowance has been chopped repeatedly recently.
I recorded that I spent 0.0002122 BTC that was worth £4.91 at the time* upon a beer. The vendor received BTC via lightning and it was in the UK.
Yes really, I should record such disposals in case tax becomes due.

I doubt that I'll exceed the CGT allowance this year, but the law says that I need to meet any tax liability so I need to track both BTC purchases and disposals.

*Now worth £6.25, but arguably inflation would mean that is what the beer would cost today.

[DrFfybes]

The question is should I put a little of my speculative portfolio into crypto now or is it too late?

Well it is too late for this year's doubling, but not too late for next year's. Seriously, nobody knows, it is all a gamble, and a yone who sauy otherwise is fooling themselves.

If it helps you decide, toss a coin.

If it comes down '1' then invest, if it's a zero then dont

[Urbandreamer]

The question is should I put a little of my speculative portfolio into crypto now or is it too late?

Well it is too late for this year's doubling, but not too late for next year's. Seriously, nobody knows, it is all a gamble, and a yone who sauy otherwise is fooling themselves.

If it helps you decide, toss a coin.

If it comes down '1' then invest, if it's a zero then dont

I'm always dubious of coin toss arguments. I have been since reading "A Random walk down Wallstreet".

https://yourknowledgedigest.files.wordp ... street.pdf

The chart derived from random coin tossings looks remarkably like a normal
stock price chart and even appears to display cycles.

So, when investing in shares, it helps to toss a coin.

[Urbandreamer]

I heard something interesting about the halving today upon the WBD podcast.

Now as we all know, or should know, the amount of gold in the world increases as more is mined. Currently at a rate of about 2%pa.
https://www.gold.org/goldhub/research/g ... 022/supply

The halving, halves the rate of supply of bitcoin. Eventually by geometric progression to zero. The supply rate after the halving next year will definitely be less than the rate of supply of gold to the market.

You actually need to do the math yourself to get the percentages.
The bock subsidy is currently 6.25, meaning that 328500 bitcoins will be produced in 2023.
https://www.sofi.com/learn/content/is-m ... -worth-it/
There are currently 19,537,099.28 BTC in existence at the time of this post so in 2023 the increase in the supply is 1.6%pa and will be half that (aprox 0.8%) in 2024 and for the next four years (ignoring that the halving happens in April).
https://bitcoin.clarkmoody.com/dashboard/

Of course we know that most countries money was initially silver, but that the gold standard gradually took over. In part it can be argued that is due to the stability in supply. We also know that while relatively volatile on a year to year basis, gold has been a good store of value and hedge against inflation. Possibly due to supply constraints.

Food for thought when considering the halving.

Ps, BTC miners don't just rely upon the block reward, They get/charge a fee. Currently about 5% of the block reward. As rewards drop, fees must increase to compensate and ensure that BTC continues to function.