“The ability to create something which is not duplicable in the digital world has enormous value… Lot’s of people will build businesses on top of that.” –Eric Schmidt
As of two days ago, the Bitcoin mining reward rate has dropped 50% from 6.25 BTC per block down to just 3.125. Though miners get a significant pay cut, the halving has become a widely celebrated event in the industry. When we take a look at Bitcoin’s overall performance there’s no surprise as to why.
The Current State of Bitcoin
Bitcoin has taken the stage. It’s now recognized as a major asset class along with the rest of crypto markets. Holding as the 9th most valuable asset in the world at its current price point, it’s drawn attention to itself.
Institutional holdings only continue to grow. With ETFs and ETNs in other major world economies joining the already successful Wall Street market, Bitcoin is going to be eaten up by these companies. With that, traditional financial entities are encouraging the retail investment and holding of digital currencies. Everyone is catching on.
Adoption is in full effect. Not only that, but there are other factors at play here. With the innovation around layer 2 networks combined with the influx of network traffic and dwindling available supply, there have been some unforeseen (by many) consequences.
Ordinals and Runes are the highlighted topics here. Simply put, Ordinals made it possible to make NFTs in the Bitcoin ecosystem, Runes, however, make it possible for fungible tokens to work in the Bitcoin ecosystem i.e. interchangeable shitcoins. With Runes coming after the halving, it’s congested networks, increased the size of the blockchain and has made for insanely high transaction fees. With that being said, there’s always a solution, so don’t worry- it’s just going to make for a more innovative network.
Here’s an Excellent X Thread on the subject by @BTCGandalf:
Historical Trends
Looking back, the halving is a huge deal. With only 21M coins, cutting the supply moving into the market is most certainly going to make for a pump in the value. Around each halving event Bitcoin has doubled in value in the months to a year following.
With the aforementioned growth within the network-can you imagine what this spike in value might look like moving forward? What many hail as the most sophisticated and most secure store of value ever created is becoming more rare and more useful. The overall upward trend looks likely to stay.
Moving Forward
We haven’t seen an event like what we’re about to witness. There may be some obstacles to work around but Bitcoin keeps the show going. This time around it’s a different playing field for users on the network. There’s a lot more going on. More traffic. More innovation. More miners. More HODLing. Only one thing is going the opposite direction: The available Bitcoin supply. Act accordingly. It’s the dawn of a new economy. NFA.
