22 Comments
Oct 4, 2023·edited Oct 4, 2023Liked by Jesse Myers

Great post, Jesse. Exciting stuff.

I remember watching the 2020 halving live. Back then I expected the price to explode upward within a few days.

If I would have reviewed past patterns, I would have noticed it required about 1 year for the price to peak after the 1st halving and about 17 months after the next 2 halvings.

If the pattern repeats, the price will peak sometime in September of 2025.

Make sure your seat backs and tray tables are in their upright and locked positions. We're close to take off.

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Exactly, Mark! For now, I'm trumpeting the importance of the halving... but as we get closer to it, I will shift to cautioning that it will take 12-18 months to really see its impact. Just thrilled it is finally near!

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I really enjoyed today's Newletter. The supply-demand curves were so nice.

Can't wait for another Christmas! (April 2024)

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thanks Maali! and yep, been meaning to make those supply-demand curves, finally got around to it and I was very happy with how they came out. glad you enjoyed the piece!

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Oct 9, 2023Liked by Jesse Myers

Jesse, I'm still a little confused about point #4. Is the post-halving price adjustment insensitive to daily trading volume because of the (Austrian?) idea that prices are set at the margins?

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It's a bit of inductive reasoning, basically. Price goes sideways when supply = demand, that's known. And so, when Bitcoin's price goes ~sideways for the year or so before each halving, we can infer that Bitcoin's price has found supply-demand equilibrium.

Therefore, we can deduce that supply and demand are ~equal in this period. No matter how much traded volume there is, it nets out to supply equaling demand.

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Good post

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thank you!

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Oct 5, 2023Liked by Jesse Myers

What a skilfully written post, Jesse! You have so beautifully, and elegantly, explained the relatively mysterious topic of the Halving in a way that just about anyone could understand. You've really outdone yourself on this one. Loved it.

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Thanks Chryss, that's awesome praise! Appreciate your support and hope this helps you orange pill some friends and fam

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Oct 5, 2023Liked by Jesse Myers

If the majority of the 900 coins introduced daily are currently being hodled by the miners then the halving will not serve as a supply shock. In this scenario wouldn't it be right to assume the impact would be muted?

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I think any miner hodling amounts to demand, aka part of that blue column of $900m. So the supply shock is unaffected

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Oct 5, 2023Liked by Jesse Myers

Enjoyed reading that. Thanks

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author

Thanks Muhammad, glad you liked it!

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It’s great. Please send out more like this to remind us of the fundamentals

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I’ve read countless articles and books regarding bitcoin and halvings. This is the best, and the first 3 pictures are like the cherry on top. Well done sir 🫡

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What an awesome compliment, thank you Salvatore!

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Oct 5, 2023Liked by Jesse Myers

I've been thinking about this and would appreciate feedback on my theory; I am not so sure that a reduction of supply will necessarily create an increase in price, I'll try to explain my thinking.

If there is currently $900b per month demand for Bitcoin, when the supply is reduced by half and assuming the $900b remains constant, the effect will be that the purchasers will receive half the amount of Bitcoin from the same $ amount. You see, buyers do not generally buy a predetermined amount of Bitcoin, instead they accept however much their $ amount will buy them. So unless buyers are willing to spend twice as much because they are not willing to accept less Bitcoin, they will just receive less Bitcoin with their purchase.

This will make a given amount of Bitcoin harder to acquire but will not necessarily drive price if there are not more $ being allocated.

Think of it this way, let's say you currently DCA $500 per month, after the halving, will you allocate $1k per month or will you accept that you'll receive half the amount of Bitcoin than you would have previously?

Or another way, Michael Saylor does not have a set amount of Bitcoin he wants to buy each quarter with the operating profits from Microstrategy, instead he buys what he can with the amount of profit available. After the halving he will still have the same amount of quarterly profit available to spend, all things being equal, it is just that he will only be able to acquire half as much Bitcoin, thus making it more scarce, but not necessarily driving price.

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The first half of your hypothetical assumes the price of Bitcoin will 2x as a result of the halving. Only way for people to spend $900M on half as much issuance is if the value of each unit of issuance doubles

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I disagree, for the reason explained later in my post, where the unit of bitcoin that can be purchased is variable. People can spend the same amount of $ and receive a lesser amount of Bitcoin.

You see, bitcoin is not like gold for example, where saled are denominated in ounces and the $ is variable, instead bitcoin is divisible by 100m sats and you can purchase any number of sats with a fixed amount of $.

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fantastic read again mate

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Christmas?! 🧐🤔

How about your birthday. Christmas having the eternal creator of the universe connected to it might be more important than the halving of a secular money. No matter how hard it is to “get”.

Thank you for your excellent posts.

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