• Bitcoin halving: supply shock imminent
  • Previous halvings: price surges, innovations
  • Crypto future: vast investment potential

In less than 17 days the ultimate supply shock is going to hit the bitcoin market.

The news and coverage of this in the coming weeks is going to amplify. Even already there’s already a bundle of information hitting the mainstream media about it – most of it wildly inaccurate though.

Online there have been examples of mainstream news talking about the bitcoin halving cutting the price of bitcoin in half to stimulate demand for the assets.

This has apparently occurred on both German and French news (admittedly I’m not fluent in German or French so I’m taking the source report word for it).

I have also heard people who I had thought to be quite knowledgeable about the upcoming halving and its mechanics talk wildly about it, oblivious to what factually takes place.

Thankfully I’ve been around the block a few times so to speak with this upcoming supply shock, so I’m always happy to lend a hand to help educate.

And it’s really important to understand what is going on, to help get your head around what might be coming in the months after it.

It’s not always about bitcoin

This upcoming halving in 17 days will be my fourth time I’ve seen this event take place.

What happens is that hard baked into bitcoin’s code, is a function that cuts the block reward for blockchain miners in half. This means that over about 100 years the entire supply of bitcoin is slowly brought to market, the final bitcoin sometime around the year 2140.

What it also means is that the reduction of new bitcoin into the market every 210,000 blocks (which is about four years) is slashed by 50%.

The first “halvening” in 2012 cut the block reward from 50 BTC to 25. I remember it being a really big deal at the time. Subsequently this proved to be a catalyst for the first real crypto bull market and then the following crypto “winter” where prices tailed off and the market was said by the mainstream to be “dead”.

This period from the first halvening in 2012 to the next one in July 2016 was about four years. But even during that period after the first halvening, bitcoin’s fiat-converted price went from $12 in November 2012 to a bit over $650 in July 2016 – a 5,316% rise.

But that wasn’t the only thing going on.

During that first halvening period we also saw the creation, development and innovation other crypto, new crypto that hadn’t existed before.

Crypto like Ripple (now XRP) founded in 2012, expanded their codebase, built partnerships and their ecosystem. By the time the next halving in July 2016 was about to take place, Ripple had built a crypto network with a market cap around $200 million.

Stellar is another formed off the back of Ripple when Jed McCaleb left Ripple (he was one of their founders). Stellar would debut in 2014 and by the 2016 bitcoin halving, two short years later, have created $11 million in value from effectively nothing.

These are just two examples of the big cryptocurrencies (Ripple, now XRP has a market cap of $32 billion, and Stellar $3 billion) that exist today that were spawned in the innovation and development melting pot that took place during the first halvening period.

Hundreds of millions, billions in value created during a period that saw price spikes, booms, busts, and crazy volatility. And all the while the mainstream were saying the entire space was a scam and that bitcoin was a gigantic Ponzi scheme.

Then we had another halvening in July 2016. And for the next four years we saw the value of bitcoin’s fiat converted prices rise again. From around $650 in July 2016 to over $10,000 by the halvening in May 2020 today. Another 1,438% rise over that time frame… and 83,200% higher since the first halvening event.

And in the last four years since the 2020 halvening, the same pattern has been unfolding. Today bitcoin’s price has been trading around $65,000 to $70,000. Around 550% higher since the last halvening and over 541,000% higher since the 2012 halvening.

While bitcoin’s price in terms of dollars, pounds and other fiat currencies remains volatile in short term bursts, when you look over time (and a relatively short time at that) its comfortably the best performing asset long term in history.

And what we see with every halving event is speculation and misinformation about what the halving is, and what happens when it occurs. And every time (so far) the long term pattern remains intact – that this reduction in supply against a backdrop of increasing demand sees the long term value of bitcoin increase.

But beyond that we see an explosion of other opportunities in this market and related to this market explode after the halvings take place.

Be it through other crypto networks that have been innovating and developing while the attention is on bitcoin, or through an increasing number of more traditional, publicly listed companies on stock markets around the world benefitting from the rise in bitcoin.

The incoming eclipse

While I believe long term bitcoin’s story continues to unfold and play a crucially important role in global finance, I think that smart money should be looking at the other opportunities this presents.

I believe that long term bitcoin and the wider crypto market begins to eclipse traditional finance in a way that frankly terrifies the world’s central banks, governments and controlling powers.

As this eclipse takes shape it will unlock wealth-creation potential for investors in all kinds of markets, from the crypto market to the stock market.

Already there are several catalysts in place, that extend beyond bitcoin’s halvening that indicate this future – a crypto future (or digital assets as many like to say) is no longer a possibility but an inevitability.

And if that’s the case, which I believe it will be, then you’ll want to have placed your stake in this gigantic game-changing opportunity before it really kicks into high gear after bitcoin’s halving.

Until tomorrow,

Sam Volkering
Contributing Editor, Fortune & Freedom