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🥜 Don't panic.
PLUS: Halving Impact
Today’s edition is brought to you by LightLink – an Ethereum Layer 2 that offers users instant, gasless transactions.
GM to all 64,602 of you. Crypto Nutshell #299 keepin’ chill... 🧊🥜
We’re the crypto newsletter more electrifying than a group of rebels fighting against an oppressive empire in a galaxy far, far away... 🌌 ⚔️
What we’ve cooked up for you today…
🤨 What happens after the halving?
📈 When in doubt, zoom out
🐂 Bull market corrections
💰 And more…
MARKET WATCH ⚖️
Prices as at 7:00am ET
Only the top 20 coins measured by market cap feature in this section
WHAT HAPPENS AFTER THE HALVING? 🤨
BREAKING: Goldman cautions against extrapolating previous bitcoin halving cycles for price predictions
Bitcoin’s next halving is less then 48 hours away!
For those of you who are new to crypto, this upcoming halving is set to reduce the daily issuance of new Bitcoin from 900/day down to 450/day.
(it’s programatically set - no one can change this)
The past 3 halvings have preceded HUGE price rallies in BTC.
And the crypto community is confident that history is set to repeat itself.
But Goldman Sachs just warned investors from reading too much into previous cycles.
"Historically, the previous three halvings have been accompanied by BTC price appreciation after the halving, although the time it took to reach the all-time highs differs significantly. Caution should be taken against extrapolating the past cycles and the impact of halving, given the respective prevailing macro conditions."
The chart below shows Bitcoin’s price performance after previous halvings:
The trend is pretty clear…
Following the halving, Bitcoin’s price has always gone up.
But keep in mind, we’ve only got 3 data points here…
So who knows what could happen.
But as we explained yesterday, we do believe this time is different.
(It literally already is different - hitting a new all-time high before the halving is unprecedented)
Everyone is underestimating the long-term impact the ETFs will have on the market.
It’s fitting to end this section with the classic Mark Twain quote:
“History doesn't repeat itself, but it often rhymes.”
We think investors selling their Bitcoin heading into the halving have completely lost their mind. 🧠
We aren’t just saying that now, either.
Check out our 2024 Bitcoin Halving Report we wrote 9 months ago.
(our free gift to you - it’s valued at over $2,500)
At the time, Bitcoin was trading at $29,000.
Our advice then, remains the same now:
“We won't tell you what to do, but we'll tell you what we're doing.
Buying as much goddamn BTC we can get our hands on before the halving.”
TOGETHER WITH LIGHTLINK ⚡️
We love Ethereum.
But, there’s 1 thing we hate.
Gas fees.
Using Ethereum can not only be slow, but also costly.
That’s where LightLink comes in.
LightLink is a up & coming Layer 2 blockchain, built on top of Ethereum, with Celestia under the hood.
The goal? Fix Ethereum's worst 2 problems. LightLink offers users instant & gasless transactions.
The best part?
LightLink has just launched its native token ($LL) via Fjord’s Liquidity Bootstrapping Pool (LBP).
Unlike traditional token sales where the price is set in advance, LBPs allow for dynamic pricing.
This means the price of the token will automatically react to supply and demand, ensuring fair pricing & keeping bots at bay.
Why is LightLink gaining so much hype?
Locked in $4.5 million in seed funding 💰
Partnerships with Animoca Brands and Celestia - Industry juggernauts 🤝
Has achieved an average gas fee of 0.00 ETH (completely gasless!) ⛽
WHEN IN DOUBT, ZOOM OUT 📈
Despite all the volatility, Bitcoin is up 8x since the last halving.
Ignore the noise of short-term price movements.
That’s the latest message out from Anthony Pompliano.
When the news broke out that Iran was attacking Israel, Bitcoin immediately crashed.
During times of uncertainty and chaos Bitcoin is supposed to go up right?
It’s a hedge against uncertainty right?
Well, it didn’t…
So what happened? 🤨
Pompliano’s simple answer is to just zoom out:
“The last halving… It was $8,000. Today it’s $64,000. Name another asset that’s performed that well over a four year cycle. You can’t.”
During events like these, investors scramble to sell anything they can:
“When there’s these uncertainty events… Investors sell anything that’s liquid for dollars.”
And since Bitcoin trades 24/7/365, it was one of the only markets that was available.
(The same thing happened during the covid outbreak - liquidity crisis)
We posted this chart the other day, but you can see the impact that the Russia - Ukraine war had on both BTC and the stock market.
Continuing on, Pompliano explains that just as Bitcoin led on the way down, it’ll also lead on the way up.
“On the way back up, Bitcoin will be the leader in the recovery. And my guess is it will continue to perform just as well as it did for the last four years, for the four years to come.”
Closing out the interview, Pompliano gave some advice for everyone in the Bitcoin market.
“If you’re buying Bitcoin and you’re trying to predict what the price is in an hour, a day, a week or even a month. That’s probably a fool's errand… The people who hold it for the long-term are going to do quite well.”
Keep it simple.
Just HODL. 💪
BULL MARKET CORRECTIONS 🐂
When Bitcoin goes through a correction, it’s always worthwhile checking in on previous bull markets drawdowns.
So let’s put this recent correction into context.
If you’re new to crypto, price corrections like these are common. 📉
Historically, bull market uptrends see price corrections greater than -25% from the local high.
We’ve even seen some corrections exceed -60%. 😱
The chart below visually breaks down Bull Market Correction Drawdowns of previous cycles.
The coloured bars coming down from the top of the chart indicate the relative size of corrections from local highs. (the longer the bars, the larger the correction)
Here’s the largest drawdown’s we’ve seen during previous cycles:
🟠 Genesis to 2011: -49.45%
🔴 2011 to 2013: -71.15%
🔵 2015 to 2017: -36.01%
🟢 2018 to 2021: -62.62%
⚫️ 2022+: -20.1% (September 2023)
The current correction is only at -16.01% (no where near as large as previous cycles and not even the largest of this cycle… so far…)
So what’s the takeaway from this data?
The drawdowns this cycle have been relatively “small” for Bitcoin’s standard.
Perhaps the ETFs have played a part in reducing downside volatility…
When in doubt, zoom out. 🔎
CRACKING CRYPTO 🥜
Hong Kong's Bitcoin, Ethereum ETFs projected to hit $1 billion in assets within two years. Hong Kong's Bitcoin and Ethereum ETFs could see inflows reaching $1 billion in 2 years despite hesitancy on Chinese investors' exposure.
Bitcoin halving searches on Google is at its highest point ever. Search interest in the term ‘Bitcoin halving’ has reached record levels and is on track to soar to “peak popularity” by the end of the month.
Kraken Releases Own Crypto Wallet, Joining Competition With Coinbase, MetaMask. According to a blog post shared with CoinDesk, the new Kraken Wallet will be the first from a major exchange to be open-sourced.
WHAT WE’RE READING 📚
Want to get even smarter? Check these out.
p.s. all completely FREE
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The Bitcoin ______ is the set of rules that define how the Bitcoin system operates. |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Click to watch 😂
Trivia Answer: A) Protocol 🥳
The Bitcoin protocol refers to the set of rules and procedures that govern the operation of the Bitcoin network. It acts as the backbone of the entire Bitcoin system
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