13 June 2020
06 June 2020
16 May 2020
The Halving
The halving will occur sometime in the next week. I'll come back to the subject after we know its immediate effects.
The chart below shows bitcoin price and volume for the past week. (NB: This is unlike most of my 'Bitcoin in the News' charts, which cover an entire month.) Before I looked up the exact time of the halving, I guessed it was on 11 May, based on the price volatility and the volume spikes that day.
Cointelegraph -- the service behind the price chart -- announced,
Bitcoin’s third halving event took place at 7:23 p.m. UTC [Universal Time Coordinated, aka GMT] on Monday [11 May 2020], according to data from Tradeblock.com. Having overcome the halving, Bitcoin is trading at $8,500, with market dominance of 67% as of press time, according to Coin360.
in a story, It Happened: Bitcoin Just Experienced Third Halving in Its History, published that same day. Note also the 1000 point drop and volume spike -- the largest of the week -- on the previous day, 10 May. I'll look at these events in more detail for next month's 'Bitcoin in the News' price post.
09 May 2020
Bitcoin in the News : 2020-04 More++
I'm in the camp that believes the halving is already priced in, and that other, still unknown factors will determine the ensuing bull/bear psychologies. Any other scenario assumes that the bitcoin market is not efficient.
Two stories dominated the April news. The first was the continuing fallout from the March coronavirus crash. The second was the 'halving'. About a third of the news stories on my short list were on the halving. I decided to concentrate on those to learn what the experts had to say.
2020-04-02: What to Expect When You’re Expecting... the Bitcoin Block Halving (cointelegraph.com)
"On both prior occasions, Bitcoin surged to a new all-time high within 12 months, with the latest coming in December 2017 when the price reached about $20,000, which was followed by a massive decline," Bill Herrmann, CEO of alternative investment banking firm, Wilshire Phoenix, told Cointelegraph in an email on March 10.
That story had a number of bullets delineating its main points:-
Times have changed since Bitcoin’s inception
Tying the coronavirus into crypto and the halving
Bitcoin’s halving comes every four years
BTC price may not yet reflect the halving event’s impact
2020-04-03: Manufacturers Mark Down Bitcoin Miners as Price Drop, Halving Change Calculus (coindesk.com)
Last month’s [March] crash in cryptocurrency prices has prompted manufacturers to sell inventories at a discount, in some cases as steep as 20 percent, over the past few weeks. Both the newest models and slightly older [mining] machines have been marked down. Complicating the matter is the imminent bitcoin (BTC) halving in May that will reduce the network's mining reward by half, causing most miners to be less profitable if bitcoin’s price doesn’t increase significantly by then. [...]
Blockware Solutions, a reseller of bitcoin ASIC miners in North America that also operates mining facilities, said in a recent research report that the market crash in March, together with the coming halving, has led to a significant decrease of bitcoin’s mining computing power -- which in the long run, could be an encouraging sign for the market’s efficiency.
2020-04-08: Bitcoin Cash Undergoes 'Halving' Event, Casting Shadow on Miner Profitability (coindesk.com)
Bitcoin Cash – the blockchain that forked off Bitcoin in 2017 – has just reduced its block rewards by half, causing many miners to see gross margins drop to near zero. [...] The Bitcoin Cash event foreshadows the halving scheduled for the Bitcoin network in about 35 days. Bitcoin is 26 times larger than BCH in terms of market capitalization.
2020-04-12: May’s Bitcoin Rewards Halving Will Force Weak Miners Off the Network (cointelegraph.com)
The Bitcoin miner reward halving is almost here, but what if there’s no price pump? Can the miners stay afloat?
Bullets:-
Miners also affect the price
Bitcoin’s price didn’t rise. Wait. What? [some 'need the price to stay at $7,600–$13,000']
Hedging: Futures and options
Miners still have a few tricks [e.g. 'colocation services', 'mobile mining units', 'switch to another coin']
The Bitcoin show must go on
2020-04-14: Options Market Signals Doubt Bitcoin Price Will Rise After Halving (coindesk.com)
While some expect bitcoin’s (BTC) upcoming reward halving to light a fire under the cryptocurrency, the options market seems worried about the event turning out to be a wet blanket.
Bullets:-
Halving is not always bullish ['Litecoin, the seventh-largest cryptocurrency, underwent reward halving on Aug. 5, 2019, after which the cryptocurrency’s price fell'; others]
Put options draw higher prices
Equities are not out of the woods yet
2020-04-16: Bitcoin Showing Unprecedented Pre-Halving Price Action; Here’s What This Means (bitcoinist.com)
Bitcoin’s upcoming mining rewards halving has long been looked upon as a fundamental event that would help bolster its underlying strength and catalyze some immense upwards price action. This sentiment has been largely rooted in historical precedent, as the benchmark cryptocurrency has long seen immense bull-favoring volatility in the time directly preceding and following this event. It doesn’t seem as though the same can be said for the halving that is occurring in just a few weeks from now, however, as this is the first time in Bitcoin’s decade-long history that it is entering the halving with a negative 90-day return.
2020-04-22: What Halving? 2 Factors Making Some Analysts Turn Bearish on Bitcoin (cointelegraph.com)
As the Bitcoin price dropped to sub-$7,000, technical analysts pointed out that BTC broke down from a crucial trendline dating back to March 16. While markets signal for short-term relief, traders foresee a severe pullback occurring for two key reasons despite less than three weeks remaining before the much-anticipated Bitcoin halving. The two compelling cases for a Bitcoin correction in the foreseeable future are a breach of a major trendline signaling overhead resistance and a lower high pattern at a high time frame.
Bullets:-
Challenging for Bitcoin to recover on a straight line from near capitulation
There are variables to prevent a big crash
2020-04-27: Bitcoin Hits Highest Level Since Black Thursday Amid Halving Buzz (coindesk.com)
The top cryptocurrency by market value rose to $7,800 early on Monday to hit its highest level since March 12 -- dubbed "Black Thursday" -- when prices fell from $7,950 to $4,700 as the coronavirus pandemic crashed most markets.
2020-04-30: Bitcoin (BTC), cryptocurrency prices rise due to central banks, halving (cnbc.com)
The entire market capitalization or value of cryptocurrencies jumped $35.3 billion in 24 hours. Bitcoin was at $9,388.30 -- or up 18.57% in the last 24 hours
That last story was the only one in the list to emanate from a non-cryptocoin specialist. In a nutshell:-
- The past is not necessarily prologue
- Miners face a shakeout
- In the supply-demand equilibrium, the decreasing supply favors a price rise, while new demand is unknown
- The coronavirus background represents a significant, unpredictable element
- Technical trends can't be ignored
The halving will occur sometime in the next week. I'll come back to the subject after we know its immediate effects.
02 May 2020
Bitcoin in the News : 2020-04 Price
In March, the downtrend continued. From a peak of US$ 9000, the bitcoin price fell to US$ 5000, before recovering to US$ 6000.
In April, the price returned to its March peak.
Another remark from last month is also appropriate:-
Comparing the '2020-02 Price' chart, note the loss of most price sources in the current chart. They were restored sometime after I took the snapshot.
The same happened with the chart shown above. All price sources were missing at the time I took that snapshot, but were back when I wrote this current post. As for the spikes in volume during the month, I count three:-
2020-04-02 16:00 ?
2020-04-23 12:00 jump in price
2020-04-29 16:00 big jump
The first spike marked '?' had no corresponding change in price. The two other spikes accounted for much of the month's gain in price. Only the third spike merited atention in Cointelegraph's Analysis category:-
-
2020-04-29:
With Bitcoin Price Surging, What Do Key Trends Say About BTC Halving?
•
'Ahead of Bitcoin’s upcoming halving, all major trends surrounding the premier cryptocurrency seem to be positive.'
-
2020-04-30:
Interest in Bitcoin Spikes Worldwide During COVID-19 Crisis
•
'Bitcoin might not be the most stable asset out there, but it is more stable than some economies.'
- 2020-05-01: Top Crypto Traders Explain Where Bitcoin Price Will Go After $9,400 Rally • 'Leading crypto traders lay out both bearish and bullish scenarios for Bitcoin as the halving approaches.'
When will 'the halving' occur? Another Cointelegraph article, Bitcoin Halving Explained (December 2019), informs,
Q: When will the next Bitcoin halving take place? • A: The week commencing 18 May 2020, based on current performance, but it might be 14 May.
That article is five months old, so I assume the date has been pinpointed more precisely since then. I'm in the camp that believes the halving is already priced in, and that other, still unknown factors will determine the ensuing bull/bear psychologies. Any other scenario assumes that the bitcoin market is not efficient.
Back to the three April spikes in volume, Cointelegraph's Price Analysis tag served up analysis stories covering each spike.
- 2020-04-03: Price Analysis April 3: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LEO • 'Bitcoin price continues to push higher but major cryptocurrencies should sustain above their 20-day EMA to confirm that the downtrend might be over.'
- 2020-04-24: Price Analysis 4/24: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LINK • 'Bitcoin is close to breaking out of its overhead resistance. This has resulted in strong price action in some altcoins, which suggests that the investor sentiment is bullish.'
- 2020-04-29: Price Analysis 4/29: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, XLM • 'Bitcoin’s impressive rally has pushed the crypto markets higher, leading traders to wonder if the uptrend will last through the halving event.'
- 2020-05-01: Price Analysis 5/1: BTC, ETH, XRP, BCH, BSV, LTC, BNB, EOS, XTZ, XLM • 'Most major cryptocurrencies are facing resistance at higher levels, meaning a few days of consolidation could be needed before the rally can resume.'
Those first two calls -- 04-03 & 04-24 -- were accurate. The last two will have to wait until next month's cookie cutter 'Price' post.
11 April 2020
Bitcoin in the News : 2020-03 More++
Remember when Bitcoin was supposed to be digital gold? That’s what guys at Goldman Sachs were saying for at least two years. The theory: Bitcoin would behave as a safe haven asset, a digital one, in times of trouble. When the recession comes, everyone will want one.'
As the price slump continued into March, that theme was repeated many times. Some analysts came to the same 'safe haven' conclusion. Others came to the opposite conclusion. Here are a half dozen 'bitcoin vs. gold' articles flagged by Google News in March. Unlike the Forbes.com article, these were all from services specializing in crypto currencies:-
- 2020-03-03: Bitcoin Has 'Solidified Role' as Investors’ Digital Gold -- Grayscale (cointelegraph.com)
- 2020-03-10: Gold Bugs Smug as Bitcoin Follows Markets’ Plunge (beincrypto.com)
- 2020-03-14[?]: Everything You Need to Know About Gold and Bitcoin (coinnewsspan.com)
- 2020-03-14: Bitcoin & Gold 'Are Doing the Same Thing' in Coronavirus Crisis: Pomp (cointelegraph.com) • 'Pomp' = Anthony Pompliano
- 2020-03-17: Here’s How Bitcoin Can Bring Digital Gold Narrative Back to Life (ccn.com)
- 2020-03-24: 'Only Fools are Choosing Bitcoin' Says Gold Bug Peter Schiff (cointelegraph.com)
Half of those references are to Cointelegraph.com articles. While I was preparing this present post, Cointelegraph kept playing an embedded video:-
- 2020-04-09: The End of the “Fiat Experiment” and the Rise of Bitcoin | Interview With Anthony Pompliano (youtube.com; Cointelegraph channel)
That's the same Anthony Pompliano (aka 'Pomp') mentioned in the article titled 'Bitcoin & Gold "Are Doing the Same Thing"'. I'm not much interested in bitcoin cheerleaders, but at times he makes some good points. At other times he's talking through his cap.
Has Anthony Pompliano ever debated Peter 'Only Fools are Choosing Bitcoin' Schiff? Given that bitcoin has no intrinsic value, maybe 'digital gold' is a euphemism for 'fools gold'.
04 April 2020
Bitcoin in the News : 2020-03 Price
In January, the price was up, up, and away. [In February], that trend continued until mid-month, then reversed direction.
In March, the downtrend continued. From a peak of US$ 9000, the bitcoin price fell to US$ 5000, before recovering to US$ 6000.
Comparing the '2020-02 Price' chart, note the loss of most price sources in the current chart. They were restored sometime after I took the snapshot. Although there were a half-dozen instances of high volume, for this post I'll concentrate on a one week period covering the slide from US$ 9000 to 5000:-
2020-03-07 16:00 peak for month
2020-03-12 00:00 start of slide
2020-03-13 00:00 end of slide
I found two relevant stories in Cointelegraph's Analysis category. Both attributed the decline to the general panic in worldwide markets:-
-
2020-03-14:
Bitcoin Price Correlates With Traditional Assets, but Not Entirely
•
'Following the World Health Organization's recent declaration of the novel coronavirus pandemic on March 11 with the independent research body citing 118,000 cases and more than 4,000 deaths globally this rosy picture seems to have reversed almost overnight. Additionally, ever since news of the medical emergency went live, markets all over the world began to crash at an unprecedented rate, with powerhouse economies such as Australia and India already gearing up for a period of heavy recession.'
- 2020-03-14: BTC Plunge, YouTube Ban & Other Challenges: Bad Crypto News of the Week • 'Bitcoin has been on a downward streak for the last week, down around 15 percent over the last seven days. That's bad but it could be worse. You might have put your money in stocks. Some people, though, remain optimistic.'
The theory of bitcoin as a 'safe haven' was thereby thoroughly debunked. That second story, 'Bad Crypto News of the Week', is an ongoing theme. I noted three other stories on the same theme over the past month (or so):-
- 2020-02-29: Coronavirus, Drug Dealers and Buffett's BTC: Bad Crypto News of the Week
- 2020-03-07: Steem Scandal, Blockchain Voting Fiasco & More: Bad Crypto News of the Week
- 2020-04-04: April Fools, Celebrity Scams, & Manipulated Markets: Bad Crypto News of the Week
Finally, here are the relevant stories from Cointelegraph's Price Analysis tag. The quotes are from the tag's index page:-
-
2020-03-06:
Price Analysis Mar 6: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LINK
•
'Several cryptocurrencies have broken out of their first resistance levels, which suggests that the bulls might be back in the game.'
-
2020-03-09:
Price Analysis Mar 9: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LINK
•
'The crypto markets have turned down sharply over the weekend and are threatening to wipe out all the gains made in 2020.'
-
2020-03-12:
Price Analysis Mar 12: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LINK
•
'The crypto markets are currently facing a strong wave of selling leading traders to focus on whether cryptocurrencies will form panic bottoms soon.'
-
2020-03-13:
Price Analysis Mar 13: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LEO
•
'The crypto markets are attempting a relief rally but are struggling to sustain the higher levels. This shows that selling is not over yet.'
- 2020-03-16: Price Analysis Mar 16: BTC, ETH, XRP, BCH, BSV, LTC, EOS, BNB, XTZ, LEO • 'The crypto markets are showing some buying at lower levels, which is a positive sign as it shows that investors are accumulating on dips'
Each of those stories starts with 4-5 paragraphs of analysis relating the crypto market to global trends. Examples (the italics are mine):-
2020-03-06: 'Roughly 42% of the total Bitcoin supply has not moved in the past two years. This shows that the investors are holding on to their Bitcoin as they expect the price to rally further.'
2020-03-09: 'Although Bitcoin (BTC) has dropped about 26% from its highs, it is still up about 7% year-to-date. This shows that it is outperforming both equity and oil markets.'
2020-03-12: 'Volatility has spiked to levels not seen since the last financial crisis. This shows that fear has gripped the traders and they are likely to sell everything at hand. Even gold sold off today.'
All of those trends probably lasted no longer than the time it took to write the analysis. 'This shows that' fuzzy thinking is the norm for bitcoin believers.