The price of Bitcoin is rising and the internet is soaked in FOMO memes:
“ETF funds alone already need more than 10x of Bitcoin mined each day and in 2 months it is halving and they will need 20 times the daily mined amount” => FOMO!!!! Buy NOW!!!!!!!
Let’s break this down and see what’s true about this. First of all, how much do funds buy.
There are 900 BTC (6246.25 BTC) mined daily. In the 14 days up to Feb 20 ETFs have bought Bitcoins (net value, so BTC sales are subtracted) for $3.535 billion = 68868 BTC = 4919 BTC/day => 5.46 times the daily mined coins (and that’s not counting the fees, only issuance). But let’s suppose there were probably days when it was 10x and probably this will rise…
Are we in for a supply shock?
Currently 6.25 new BTC are mined every 10 minutes = 328500 BTC/year. After halving it will be 3.125 BTC = 164250 BTC/year.
In the last 24 hours (in Feb 20 2024), 553,087 BTC have been traded on public exchanges (non-OTC) alone. As a reminder, in a year (before halving) 328,500 BTC will be mined.
Thus, all Bitcoins mined in a year are traded on the markets within 14.5 hours(!). Thus, the newly mined Bitcoins represent 0.16% of the Bitcoins that are traded on public exchanges (excluding OTC). More than half of BTC trade is probably OTC (some estimates say two thirds are OTC, but that seems excessive).
… which doesn’t mean that halving won’t cause a Bitcoin moon (such as the mini-moon we’re experiencing now)
… but it’s certainly not because there will be fewer Bitcoins for sale due to halving
… on the contrary, a lot of people probably want to cash out and are waiting for halving to sell at a higher price …
Lesson: Numerology stories, if they work, they work only until they stop working. Don’t rely on them.
Party!
But that’s no reason not to celebrate halving! It’s an important milestone that only happens once every four years. If you happen to be in Bratislava on the 20th of April, come to the halving party… if tickets are still available. You can get them here.
