❖Halved Emotions and Logic❖
Many friends believe that the impact of "halving" on #Bitcoin is scarcity, which has driven people to hoard and speculate on BTC emotionally.
In fact, the so-called "halving" refers to the halving of production, where the entire network invests the same cost (computing power) to mine, but the output of #BTC is halved.
If the network's computing power is halved, the mining cost of BTC remains the same. Due to expectations (expecting BTC to rise) and sunk cost factors (the cost of mining machines is a sunk cost, as long as mining output exceeds the variable cost, miners will continue to mine), the computing power of BTC will most likely be higher than halving.
Otherwise, as long as BTC's computing power exceeds half, the mining cost of BTC, or production cost, will increase. As more and more high-cost BTC is mined, the BTC price is pushed to a high point. Therefore, the several peaks of the BTC bull market are not near the halving, but more than a year after the halving.
So, the logic driving the bull market of "halving" is not only emotional, but also cost factors. Of course, cost cannot determine price, especially for "coins," price falling below cost is too common, haha.
❖LTC Halving❖
Some friends believe that the performance of LTC halving in 2023 is far from that of 2019, and this may also indicate poor performance in this round of BTC halving.
In 2019, the Litecoin halving occurred in August, and the peak price occurred in June. This is certainly due to the emotional impact of halving.
But do you think this is a coincidence? In June 2019, the Federal Reserve began cutting interest rates!
❖Macroeconomics and Bull Market❖
Many coin friends scoff at macroeconomics because in the past, BTC and the US stock market were indeed not highly correlated.
But in reality, BTC may have hardly ever escaped the macroeconomic cycle.
We all know:
On November 28, 2012, BTC halved for the first time, and about 12 months later (November 2013), BTC reached its peak.
On July 9, 2016, BTC halved for the second time, and about 17 months later (December 2017), BTC reached its peak.
On May 12, 2020, BTC halved for the third time, and about 18 months later (November 2021), BTC reached its peak.
Perhaps we didn't notice:
In January 2012, the US M2 growth rate reached its peak, and about 22 months later (November 2013), BTC reached its peak.
In October 2016, the US M2 growth rate reached its peak, and about 14 months later (December 2017), BTC reached its peak.
In February 2021, the US M2 growth rate reached its peak, and about 9 months later (November 2013), BTC reached its peak.
The most accurate is (😂😂😂):
In November 2012, the US presidential election, about 12 months later (November 2013), BTC reached its peak.
In November 2016, the US presidential election, about 12 months later (November 2017), BTC reached its peak.
In November 2020, the US presidential election, about 12 months later (November 2021), BTC reached its peak.
The little bee has analyzed more than once that Satoshi Nakamoto designed BTC to halve every 4 years, and if it's not miners rushing to mine, the halving will occur around January after each presidential election. Satoshi Nakamoto's design definitely takes into account US policy and economic cycles, absolutely not just the little bee's fantasy!
Looking at the chart, the majority of the three recent US presidential elections occurred near the peak or small peak of the M2 money supply growth rate. As long as the M2 growth rate is greater than zero, it is easing, and when the M2 growth rate is near its peak, it indicates an accelerated easing phase. The little bee's understanding is that using relatively loose monetary policy during the election period may be conducive to economic prosperity.
And easing will lead to ample liquidity in the US dollar market, and of course, some of it will drive the speculative market.
❖2015❖
At this point, the conclusion is already very clear.
BTC's bull market every four years is driven by "halving" and also influenced by macroeconomic factors.
The key to the explosive rise of #LTC halving may not be halving, but macroeconomics. So, when LTC halves in 2023 and does not perform well, everyone does not need to worry too much. There is no need to worry about whether there will be a bull market in 2025, or even worry too much about LTC because of this.
The positive impact of BTC halving will still exist, the Federal Reserve will always cut interest rates, and the liquidity of the US dollar will always move from tightening to easing.
In 2006-2007, the Federal Reserve maintained high interest rates for about 14 months. The most pessimistic expectation is a rate cut by the end of next year, and the optimistic expectation is a rate cut in the second quarter of next year.
So, influenced by macroeconomic factors, from the start of the rate cut to the peak of M2, it should push the bull market cycle back again, rather than the original expectation of ending by the end of 2024, and may even be pushed to 2026. It is still difficult to predict specifically at this time.
❖When to Bottom Fish❖
As for when to bottom fish, we still need to wait for the Federal Reserve's dot plot this month, which can reveal two turning points.
The cessation of rate hikes is one turning point, and the start of rate cuts is the second turning point. Turning points may have a small emotional rebound, but it is not optimistic. After all, from 1960 to the present, the US M2 money supply should have experienced negative growth for the first time, and the US dollar liquidity is tight. Even with the recent rate cut, it is still a high-interest phase, and loans from the previous high-interest period are entering a period of repayment pressure, which also carries risks.
The little bee believes that bottom fishing still requires some patience. Note that some altcoins have been relatively active in rallying recently. In the short term, some altcoins may have opportunities, but in the long term, one must be very cautious about altcoins.
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