The Tide is Coming In for Bitcoin

June 19, 2020

The macro effect of the halving is beginning to play its role… It’s like a rising tide that’s just starting to come in. Its effects aren’t very noticeable at first but over time its clear.

You likely recall almost one month ago to the day bitcoin halved. It’s an event taking place every four years due to its code. There is no central authority deciding when the event takes place.

When the event takes place, the amount of newly minted bitcoin gets chopped in half. The most recent halving saw the new issuance drop from 12.5 every ten mins to 6.25 every ten minutes.

This might not seem like much at first take. But consider this. If we take these numbers and expand them over the course of a day, the result of 12.5 BTC every 10 mins equals 1,800BTC each day or $17.5 million USD. At 6.25, these numbers are chopped in half to 900 BTC or about $8.7 million.

Over the course of a year…that’s $6.4 billion vs $3.2 billion. Quite significant… So why am I telling you this?

Selling pressure is easing up. Specifically from miners. The screenshot here tracks how much miners earn (generation) and how much they sell (first spend). And over the last week, miners sold 6,231 BTC.

Before the halving, this figure averaged 12,600 BTC. In US dollar terms that’s $122.2 million per week… which is now down to $60.4 million.

The market has $61.8 million less selling pressure than before the halving.

The effect of less selling is pretty straight forward. Price rises.

What’s more, miners are selling less BTC than they are currently generating. Meaning their sentiment is turning bullish.

This type of broad overview of miners is what we talk about when we say, data can let you know if the market sentiment is bearish or bullish. It’s a bias, one that our autonomous AI trading bot acts on.

Now does this mean tomorrow’s prices will go up? Not necessarily. Remember, macro effects like this take place slowly and with persistence. Just like the rising tide analogy we mentioned earlier – you won’t realize the effect until it’s clear.

Until next time, we’re on the scent…

– Ben Lilly