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The BITCOIN Halving’s MASSIVE Effects Explained!

VIDEO TRANSCRIPT

Hey, everyone. What is going on? Welcome to Young and investing in this video. We are going to talk about the effects of the Bitcoin holding events. And you hear a lot of talkings nowadays on, for example, crypto Twitter, people saying that the whole thing is a non-event. So it doesn’t really matter to the industry or the whole thing is already priced in. And we are going to talk more about that in this video. And I’m going to give my opinion on that. And we’re going to divide it into three different stages. So the first stage is before the whole thing, and that is what’s happening right now. The second stage is just after the whole thing, the first few weeks and months after the whole thing. And then third stage is the long term after the whole thing, the several years that comes after the whole thing. So that is what we’re going to talk about in this video. But let’s start with doing a little bit of a basic briefly explanation of what the whole thing is. Some people do think that the whole thing means that if they own one Bitcoin, that that will be cut in half. Other people think that the Bitcoin price will be cut in half. But it’s not that. So what is the whole thing? Basically, it is the mining rewards for the miners that will be cut in half. So basically, every 10 minutes a block comes for Bitcoin. And the miner that finds that block gets the rewards and the reward is currently twelve point five bitcoins. And that will be cut in half to six point twenty five bitcoins. So basically, every 10 minutes, the inflation of new bitcoins being created will go from twelve point five bitcoins towards six point twenty five. Now, let’s have a further look to some details. Currently, there is an inflation of three point six percent per year. This equals 1800 new bitcoins being generated every day after the whole thing. This will be cut in half. So that means that only 900 bitcoins per day will be created. The inflation after the halving will be one point eight percent. Currently, the Bitcoin inflation per day and U.S. dollar value is 16 million. That means that after the whole thing, if the price of Bitcoin will stay the same. That is eight million per day. And the events doing all of that will come up in less than eleven days. So on the 12th of May, this whole thing event will happen. Now, let’s start with talking about the first stage of the whole thing event. Like I said, this is the stage just before the Althing, months before the whole thing. And that is what we’re currently seeing right now. Let’s first have a look at Google Trends to see what the interest in the search term Bitcoin holding currently is. And we see that months before the whole thing. So we can see that right here in the beginning of December 2019. This number was only at five, then a month later. This already went up towards 17. Then another month later, this was already 25, then 28. And then currently the beginning of April, it was was fifty eight. And currently it is expected to rise even further going towards the whole evening. So over next few days, this will probably explode. And just after the whole thing, this will continue to explode for a little while, a few weeks after the whole thing. This will probably rise to ask one hundred just based on this. We can already conclude that the whole thing is not a non-event because many people being not invested in crypto, they are currently looking up what the Bitcoin holding event is because they have no clue, probably. And they hear about it because it’s a little bit of hype and they start looking into it. What is Bitcoin holding? They start researching Bitcoin in general because they think Bitcoin whole thing is pretty cool and eventually start buying Bitcoin. You can already hear what I’m seeing right here. The Bitcoin whole thing before the whole thing sparks a lot of interest in non investors in the crypto space and they will start buying crypto when they are researching it. So basically, it’s not a non event that is just not right. And you should definitely just unfollow people that are claiming that the Bitcoin halving is a non-event because it isn’t just common sense tells us that a lot of people currently not being in crypto will start looking into it because of the Bitcoin thing. And that will make sure that a lot of new people are coming to the space that will result in extra buying into the buying side of crypto currencies. Now, let’s go to the second stage. The second stage is the Bitcoin Althing itself on the 12th of May and the few weeks or months after that. For that, let’s compare it. To the Bitcoin cash haul thing. This was the Bitcoin cash hash rate. The hash rate is the entire amount of mining power that a certain cryptocurrency has Bitcoin cash already had. It’s holding. And that’s why I’m comparing it with that. Now, a lot of people say that just after the whole thing, a lot of miners will capitulates. And I need to agree with that. For Bitcoin, this will be the same as for Bitcoin cash. But let’s first have a look at this chart. Now, the Bitcoin cash hash rate, just before the whole thing was five Hexa hashas per second. Now, currently today, this is of one point five X hashes per second. That means that the hashing power went down dramatically. It went as much down as 80 percent. How does that come? Well, basically, if the mining reward is is being cut in half. A lot of miners. Mining that specific cryptocurrency will not be profitable anymore. So they need to shut down their mining equipment. And basically then, of course, the hash rate goes down because so many miners are not longer profitable because their reward is being cut in half. Price is not rising. Of course, a lot of will capitulates. But then we have also a mechanism that fixes that for Bitcoin cash. Does does that every 24 hours for Bitcoin. This is every 14 days. But for Bitcoin cash, what happened is that 24 hours later after that, many miners stopped mining Bitcoin cash. This will adjust the difficulty. The difficulty is the level, how easy you can describe it like this, how easy or how hard it is to mine one bitcoin or in this case, Bitcoin cash. So every 24 hours, this adjusts to how much miners left and what the mining, mining power or hash rate currently is. So basically, if a lot of miners leave, hash rates will go down and difficulty will also go down. So it will be easier for the rest of the miners that states to mine one bitcoin or in this example, bitcoin cash. Now, let’s have a look at the Bitcoin chart. Can we also expect a drop in the hash rate of Bitcoin with 80 percent after the holding event? No, definitely not. So a study shows that it probably will be around 20 percent. So let’s say that we’re currently here, it will go probably up a little more by then and then drop with 20 percent. So even if we go back towards these levels, that will be around 20 percent for from where we are right now, then it would be around 90, 90 exer hashes per second. This would not be such of a problem. Like I said, of course, a lot of miners will go out. They will shut down their at their equipment and leave. The mining difficulty will be adjusted and it’s easier for the rest of the miners to mine a bitcoin. So it’s balances rebalances itself towards where they meet, of course. Now, of course, a lot of miners leaving is not a bad thing. There is something called like the miners cycle, and that means that this is just a cleaning of the mining industry. Unprofitable miners will need to find ways to be profitable again. And, of course, the most straightforward way is to buy better equipment. So many of the miners that will leave after the whole thing, they will simply shut down their old equipment. They buy new equipment and they arrive again in the crypto space because that makes them profitable again. This also depends on other factors. So not only if you have good equipment or bad equipment, but also on how high the electricity cost is. So, for example, it’s a lot cheaper to mine from China than from the United States. And it’s the most expensive in some countries in Western Europe, for example, Germany. So it depends on several things. But the most important things are the equipment and where you are located in the world’s. So after the whole thing, when 20 percent would leave, this would mean that this entire cycle starts again. So many of the unprofitable miners will will shut down. Difficulty adjusts these miners that are being shut down. They’re buying new equipment or finding ways to do mine cheaper in a cheaper way, et cetera. And a few months after that, this will all be restored. And even better, with the better mining equipment, they will be able to mine cheaper and the network will be more safe. So this will result in even a higher hash rate than before the whole thing, because these unprofitable miners will have better equipment. So if 20 percent of the entire mining space will have better equipment, that is, of course, very good. And this will result like a set in a higher hash rate than before. So this entire cycle is something very cool. And about that, there is a very interesting article being written by Block where solutions dot com. I will put it in the description down below the date. Talk about this. Big selling pressure from the miners because the miners are the main source of selling pressure in the crypto space. This means that all of this newly minted or newly mined bitcoins. A good chunk of that will be sold by the miners to golfer. Equipment cost and to cover electricity costs. Now let’s have a look at the selling pressure of Bitcoin. What does that mean? Well, if we take, for example, a Bitcoin price of ten thousand dollars. Currently, this is eight thousand seven hundred. So not too far from it. But let’s take this example. Bitcoins released per day, 1800 right now before the whole thing. The selling pressure, 18 million or this is worth the amount of bitcoins that are being created every day, every month. This is 54000 bitcoins words, 540 million USD bitcoins are released every year. Six hundred fifty seven thousand bitcoins every year. The U.S., the value is six point six billion dollars close to that. This is what is being created every year. That is insane. And every month the USD value of new bitcoins is being created. Like I said, it’s not entirely correct. But in this example is 540 million dollars. And keep in mind that a good chunk of that will be just sold to the markets, creating an immense selling pressure to the market. And after the whole thing, all of this will be cut in half. So this will become 900 bitcoins. This will become 27000 per month. And this will become three hundred thirty more or less three hundred thirty thousand bitcoins every year. So all of that will be cut in half. Now, let’s have a look at the results after this entire miner cycle happens. For that, we have a look at this. So Bitcoin at 10000 prior to halving the USD value of Bitcoin salt. This is estimated. It’s on all kinds of stuff. Like I said, go read the article if you want to have all of that. We cannot go over it. It’s a very long article, but very interesting. Anyway, this is to be estimated to be solt every single month. So two hundred and eleven million dollars worth of Bitcoin is currently being sold to the markets every single month. The minimum percentage of bitcoins that they sell is around 40 percent. At this point, posthole Erving’s who after the whole thing, what happened? Of course, a lot of the selling pressure goes away. And because they have better equipment, often at the end of the cycle, this will not only be cut in half in USD wise, but it’s more than that. So if Bitcoin would be at ten thousand dollars posthole thing, that means that for the miners they will sell 63 million dollars worth of Bitcoin every month. That’s only one faught of B before the whole thing because of this cycle and the renewal off of the equipment, et cetera. And this is 23 percent of the bitcoins that they mine. So the selling pressure will go down with Trefort or seventy five percent from two hundred and eleven million dollars per month to 63 million dollars per month. And that, of course, gives the prize the chance to go up because a lot of the seller pressure will this appear. Now, let me fresh up your minds. What happened after the last two whole things? So the first holding happened here in November 20th, 2012. After that, the Bitcoin price started rising dramatically here. The second whole thing, in July 2016, the price started going up dramatically. Now the third halting happens. What do you think will happen? Well, personally, I think the price will go up dramatically, and that is exactly what I think will happen in stage three. So a long term after the whole thing. I think the price of Bitcoin will go up dramatically, not only because the selling pressure goes down so much, but because of the selling pressure going down, the price of Bitcoin will start rising. And also because a lot of new people came to the market because of the holding events, because of the renewed interest. This will trigger a lot more people coming to the market because the price of Bitcoin will go up. And, of course, this will spark the main chunk of new people coming to the market. And that is because the selling pressure going down and new buying pressure coming up, showing up again. And that will make the price go up so hard that people will start coming in more and more and more and then probably will go into a parabolic run again. So as you can see, the holding event is such an important event. Before the whole thing, during the whole thing, and a few weeks after the whole thing, months after the whole thing and long term, this cannot be underestimated. So everyone claiming that the Litecoin whole thing is a non event or that the Bitcoin whole thing is already priced in. They are so wrong. Okay, I can agree it is priced in right now. This first stage, but not the second stage. And also not the third stage or the long term stage. So everyone, that is it for the video. I hope you enjoyed it. If so, please give it a thumbs up. And if you’re new to the channel, please make sure to subscribe by hitting that subscribe button down below to stay updated with all the latest cryptocurrency news reviews. My own portfolio and much, much more. Thank you so much for watching, guys. And as your next video, cheers. Bye bye.

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