In a recent tweet, LaDuc referred to Bitcoin as “rogue money” and asserted that there is no inherent value in the scarcity of the world’s leading cryptocurrency.
Notable figures in the Bitcoin community, including Michael Saylor, Samson Mow, and Max Keiser, have responded to LaDuc’s anti-Bitcoin stance on their Twitter accounts. If you want more of these insight articles, subscribe to Altcoin Alpha.
Will the Bitcoin Halving Disappoint?
Keiser, in particular, believes such negative commentary could propel Bitcoin towards a value of $220,000. Criticism from mainstream sources ahead of a bull run is common and often serves as a significant indicator in the ecosystem. From financial analysts to mainstream media, critics frequently raise concerns about price volatility, regulatory uncertainties, and the perceived lack of intrinsic value.
Cantor Fitzgerald is one of the largest players in global equity capital and one of just 24 prime dealers authorized to trade USG securities. Here’s their CEO Howard Lutnick on TV talking about the #Bitcoin halving soon, and the fact that #Tether is fully backed. LFG 2024! 🚀 pic.twitter.com/jZfU2ZgfyS
— Samson Mow (@Excellion) January 16, 2024
Surprisingly, the scrutiny from mainstream critics can benefit Bitcoin in various ways. When prominent media outlets and influential figures express skepticism or criticism toward Bitcoin, it tends to attract considerable attention to the cryptocurrency. As we approach the next bull run, we anticipate more criticism of Bitcoin from mainstream media and regulatory bodies.
It’s essential to acknowledge that Bitcoin has undergone multiple cycles of criticism and subsequent bull runs throughout its existence.
More Reactions to Bitcoin Halving
Meanwhile, the narrative surrounding the Bitcoin halving, also known as halvening, revolves around the supply-side dynamics. The premise is that Bitcoin’s price may experience a surge when the supply of new coins entering the market diminishes. Assuming the utilization of the Bitcoin network remains steady or grows.
The Bitcoin halving narrative, to some extent, seems like a retrospective explanation for the observed trend that Bitcoin tends to rally in the months following each halving event.
However, there is little evidence to link these price increases to the halving itself directly. Aside from the heightened bullish sentiment and media coverage typically preceding the event. Moreover, a surge in hash rate growth often occurs approximately four months before the halving, possibly due to a “Bitcoin rush,” reflecting positive sentiment. Post-halving, Bitcoin mining becomes more competitive, leading to the elimination of the least efficient miners.
NEW: Coinshare’s report on Bitcoin mining companies ⛏️ finds that Cleanspark has the lowest post-halving “cash-cost of production per Bitcoin.”
This metric, used to analyze a mining company’s sustainability, aggregates net electricity cost, interest expense, and SG&A expenses. pic.twitter.com/Yvdp8xkdWb
— Bitcoin News (@BitcoinNewsCom) January 13, 2024
While Bitcoin has become 90% more efficient since the last halving, hash rate (representing computing power for network security) and cost structures have increased. The current Bitcoin mining difficulty is at historic highs, with a more than 100% increase in computing power in 2023. Some predict a potential “miner exodus” after the halving, causing difficulty to decrease.
Bitcoin’s Price Reaction to Halving
Interestingly, maintaining Bitcoin prices above $40,000 might decrease miner returns, as increased competition and rising difficulty offset potential revenue gains. As miners are often significant sellers of Bitcoin, reduced profitability could introduce selling pressure from this group.
When we examine previous halvings in 2012 and 2016, Bitcoin’s hash rate dropped initially, followed by a steady rise and mining profitability. This pattern, however, took longer to manifest during the second halving, indicating a potential long-term decline in mining profitability after the upcoming halving.
While opinions vary, with some seeing the halving as a positive catalyst for Bitcoin prices, it’s crucial to recognize individual incentives. The only nearly certain aspect of the halving is its potential for hype, which has historically been impactful.
$34,000 a #Bitcoin by the Halving ? 🤔
In past cycles #BTC price was successively at -56%, -54% and -52% decrease from previous ATHs when the halving occurred.
If this pattern were to repeat Bitcoin could be gravitating around $34k by next halving which coincide with -50%… pic.twitter.com/YWkaV0trgC
— Titan of Crypto (@Washigorira) January 18, 2024
Conclusions
Reflecting on the three Bitcoin halvings in 2012, 2016, and 2020, each was followed by a significant price rally, albeit with varying timing and magnitude:
- 2012 Halving (November 28, 2012): Bitcoin’s price surged from around $12 before the halving to over $200 in the ensuing months.
- 2016 Halving (July 9, 2016): Bitcoin’s price rose from approximately $600 before the halving to over $1,000 in the following months. (From January 2016 to December 2017, Bitcoin’s price increased 19 times, reaching a high of over $19,000.)
- 2020 Halving (May 11, 2020): Bitcoin’s price, initially around $8,000 before the halving, experienced a substantial increase, ultimately reaching an all-time high of nearly $64,000 in April 2021.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
