To The Moon

$CME Bitcoin - main 2404(BTCmain)$ has been on a wild ride since its inception, with periods of explosive growth followed by sharp corrections. Despite the volatility, I believe there are strong reasons to be bullish on Bitcoin in the long term, with the upcoming halving event being a significant factor.

Unlike traditional currencies that can be printed at will, Bitcoin boasts a capped supply of 21 million coins. This scarcity becomes even more pronounced with the halving, a pre-programmed event that cuts the block reward for miners in half roughly every four years. This translates to fewer new Bitcoins entering circulation, further tightening supply.

Bitcoin acceptance is on the rise. More and more businesses are embracing Bitcoin payments, and institutional investors are recognizing it as a legitimate asset class. Major companies like $Microsoft(MSFT)$ and $Starbucks(SBUX)$ are accepting Bitcoin, while a growing number of investment firms are offering Bitcoin investment products. This broader adoption could significantly increase demand for Bitcoin, especially as the supply of new coins shrinks.

Bitcoin isn't swayed by traditional monetary policy, making it an attractive hedge against inflation. As fiat currencies lose purchasing power, Bitcoin's value could remain stable or even appreciate. The halving event strengthens this argument by reducing the number of new coins that could potentially dilute Bitcoin's value. However, it's important to note that the current uptrend in the US dollar index suggests fiat currencies aren't losing purchasing power at this moment.

DXY Daily Chart

The underlying technology behind Bitcoin, blockchain, is constantly evolving. Advancements in scalability and security could make Bitcoin a more efficient and attractive form of payment, further propelling its value.

Looking at historical data, Bitcoin has exhibited significant price increases following previous halving events:

First Halving: Nov 2012

BTC Monthly Chart

Bitcoin rose over 9000% in a year followed by an over 80% drop until the bottom is found.

Second Halving: Jul 2016

BTC Monthly Chart

Bitcoin rose over 3000% in one and a half years followed by an over 80% drop until the bottom is found.

Third Halving: May 2020

BTC Monthly Chart

Bitcoin rose over 500% in less than a year followed by a nearly 80% drop from the ATH until the bottom is found.

Fourth Halving estimated date: 20 Apr 2024

While past performance isn't a guarantee of future results, it can be interesting to analyze trends. You remember when you were a kid, your math teacher will give you a question that identifies the pattern?

The question here is with the first few halving data, can you find the answer to where Bitcoin will be in the future?

In the three scenarios, Bitcoin rose 9000%, 3000% and 500% respectively. 9000/3000=3 and 3000/500=6. With this in mind, the next rise could be at least 500/9=55.56%. This will bring Bitcoin price to be above 100k usd. This might happen within a year or so after the halving.

BTC Monthly Chart

There's a caveat, though. Unlike previous halving cycles, Bitcoin reached a new all-time high in March 2024, just before the upcoming fourth halving. This might influence the surge this time around. However, I am planning to increase my position in Bitcoin during this period till next year. As I am not a fortune teller, I do not know where Bitcoin will bottom from the recent selloff.

BTC Daily Chart

Bitcoin is currently in a consolidation phase and my plan is to invest a fixed amount at regular intervals to build my position and potentially average out price fluctuations. I will gradually sell off a portion of my holdings once my target price is reached, while holding some for long-term growth. In the case which what I predict doesn’t happen and the price drops drastically before my target price is reached, I will be joining the ranks of long-term hodlers... [LOL]

Remember, this is not financial advice: The cryptocurrency market remains highly volatile, and past performance is not necessarily indicative of future results. Before investing in Bitcoin, you should carefully consider your risk tolerance and do your own research.

However, based on the factors mentioned above, particularly the upcoming halving event that further restricts supply, I believe Bitcoin has the potential for significant growth in the years to come.

Do you think the upcoming halving event will have a significant impact on Bitcoin's price? Why or why not?

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