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unpluggedfinancial · 2 months ago

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Bitcoin’s Dwindling Supply: The Halving Mechanism and Its Impact on Scarcity

Bitcoin is more than just a digital currency—it’s a groundbreaking financial system built around a unique feature: its limited supply. Unlike fiat currencies that can be printed endlessly, Bitcoin’s supply is capped at 21 million BTC. This scarcity is driven by Bitcoin's halving mechanism, a process that cuts the block rewards for miners in half approximately every four years. With each halving, the supply of new Bitcoin entering circulation decreases, creating a dynamic of growing demand and shrinking supply.

What is the Halving Mechanism?

The halving mechanism is embedded in Bitcoin's code and is designed to happen after every 210,000 blocks are mined, roughly every four years. This mechanism ensures that over time, fewer and fewer Bitcoin are produced, leading to increased scarcity. When Bitcoin was first launched in 2009, the reward for mining a block was 50 BTC. Since then, the block reward has been halved multiple times:

2012: The reward dropped to 25 BTC.

2016: It was halved again to 12.5 BTC.

2020: The reward shrunk to 6.25 BTC.

2024: Following the most recent halving, the block reward now stands at 3.125 BTC.

How the Halving Reduces Daily Bitcoin Supply

The halving mechanism significantly impacts the number of Bitcoin mined each day. In the beginning, with 50 BTC rewarded per block, approximately 7,200 BTC were mined daily. After each halving, this number dropped:

2012: About 3,600 BTC were mined daily.

2020: Roughly 900 BTC were mined per day.

2024: Currently, with a block reward of 3.125 BTC, only 450 BTC are mined daily.

As the block reward continues to shrink, the daily Bitcoin production will become even smaller. By 2036, 99% of all Bitcoin will have been mined, leaving only 1% of Bitcoin to be mined over the following century. This drastic reduction in new supply is one of the most important aspects of Bitcoin’s scarcity and long-term value.

The Economic Impact of Bitcoin’s Scarcity

Bitcoin's design ensures that its supply will only become scarcer over time, making it more valuable. Much like precious commodities such as gold, the limited availability of Bitcoin positions it as a deflationary asset—one whose value increases as supply tightens and demand rises. Each halving intensifies this dynamic, putting upward pressure on Bitcoin's price as fewer coins are available for purchase or use.

With the next halving scheduled for 2028, Bitcoin’s daily production will fall to 225 BTC per day. By the time the final Bitcoin is mined, around the year 2140, the block reward will be reduced to just one satoshi—the smallest unit of Bitcoin, equivalent to 0.00000001 BTC. At this point, miners will no longer receive new Bitcoin as rewards, but they will be compensated with transaction fees to continue securing the network.

The Future of Bitcoin’s Supply: What Happens After 99% is Mined?

By the year 2036, we will have reached a major milestone—99% of all Bitcoin will have been mined. As we approach this point, the effects of Bitcoin's diminishing supply will become increasingly apparent. As supply decreases, demand is expected to grow, especially as more institutional investors and governments begin to adopt Bitcoin as a reserve asset.

After 2036, only 1% of Bitcoin will remain to be mined, with rewards decreasing at an exponential rate after each subsequent halving. As we move closer to the final halving and the ultimate limit of 21 million BTC, Bitcoin’s value as a scarce, deflationary asset will likely continue to grow, making it a critical store of value for individuals, institutions, and possibly even nation-states.

Bitcoin’s Halving and Its Role in Financial Sovereignty

The halving mechanism is more than just a technical feature—it is the foundation of Bitcoin's scarcity, which gives it its revolutionary potential. With fiat currencies facing the constant threat of inflation due to excessive money printing, Bitcoin stands out as a deflationary alternative that cannot be devalued by any central authority. Its predictable supply schedule makes it a safe haven for those seeking financial sovereignty and protection against inflationary pressures.

As Bitcoin’s supply dwindles, its role in the global financial system will only become more prominent. The halving mechanism ensures that Bitcoin remains scarce, creating a unique economic environment where supply and demand dynamics continuously drive its value higher.

Conclusion: The Power of Bitcoin’s Scarcity

Bitcoin’s halving mechanism is a crucial factor in its long-term success as a deflationary, scarce asset. Each halving reduces the number of new Bitcoin introduced into circulation, making the asset more valuable over time. As we move closer to the year 2036, when 99% of all Bitcoin will have been mined, the scarcity narrative will become even more pronounced. With the final reward being just one satoshi, Bitcoin’s hard cap of 21 million BTC guarantees its place as one of the most scarce and valuable financial assets in the world.

In a world of ever-expanding fiat currencies and government-controlled financial systems, Bitcoin offers a new way forward—a scarce, decentralized, and deflationary asset that empowers individuals with true financial sovereignty.

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bitcoincables · 1 year ago

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Understanding the Impact of Bitcoin Halving on Investors

The upcoming Bitcoin halving: the event where the rewards for Bitcoin miners will be cut in half. It's an important event for miners and holds significance for investors as well. After the halving, miners will be rewarded with 3.125 BTC for each block processed instead of the current rate of 6.25 BTC. The purpose of this halving is to control Bitcoin inflation. While the exact date is uncertain, previous halvings have led to price increases and it is expected that retail investors should pay attention to this event. 🪙

The Bitcoin halving has gained a lot of attention due to increased interest in the cryptocurrency industry, especially from institutions. Since the last halving, Bitcoin's price has risen significantly and it has become more mainstream. Historically, halvings have been followed by price surges. Analysts predict that a potential approval of a Bitcoin exchange-traded fund (ETF) combined with the halving could lead to a "craziest bull run of all time." 💰

However, it's important to note that Bitcoin is a volatile asset and the relatively illiquid market may deter traditional investors. The recent crash in Bitcoin's price, along with increased scrutiny from regulators, might make some investors hesitant to enter the market. Nevertheless, there are alternative ways for investors to gain exposure to Bitcoin, such as investing in publicly traded mining companies. Some experts believe that the halving has a bullish effect on Bitcoin's price, while others argue that there is no concrete proof of this. Overall, the halving primarily impacts miners, who will closely monitor the event. 📉

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#Bitcoin #cryptocurrency #investment #Bitcoin-halving

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cryptoventure01 · 2 days ago

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thecoinday · 20 days ago

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#it oin price #bitcoin news #what is bitcoin #bitcoin price prediction

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blockinsider · 29 days ago

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AI Drive and BTC Price Hike Propel Bitcoin Mining Stocks by 25%

Key Points

Bitcoin mining stocks surged by 25% as Bitcoin’s price exceeded $70,000 and miners expanded into artificial intelligence (AI).

Top public-listed Bitcoin mining companies in the US saw their stock prices rise significantly, with some firms benefiting from AI integration.

On Monday, the stocks of Bitcoin mining companies experienced a significant increase, soaring by 25%. This happened as the price of Bitcoin (BTC) rallied above $70,000. This surge happened just before the US election results, with macro indicators indicating a potential victory for Donald Trump. Additionally, the move into artificial intelligence (AI) by Bitcoin miners has presented new opportunities for revenue growth.

Contrasting with other cryptocurrency firms, Bitcoin mining stocks have been underperforming in recent months. After the Bitcoin halving event, Bitcoin miners found themselves in a challenging situation with rewards dropping by 50% and operational costs increasing. However, it appears that the difficult times for the crypto mining industry could be coming to an end.

Surge in Bitcoin Mining Stocks

On October 28, leading publicly-listed Bitcoin mining companies in the US witnessed their stock prices surge between 12-20%. This was in line with a broader equity market rally on Wall Street. Stocks of Marathon Digital, Hut 8 Corp, and Core Scientific saw significant increases. Mitchell Askew, the head analyst at Bitcoin mining company Blockware, stated that deficit spending and lower interest rates are driving global liquidity higher. He also noted that investors are fearful of high inflation over the long term.

Askew also mentioned that Bitcoin miners who could no longer operate profitably after the halving event in April have now exited the market. These miners had been creating significant selling pressure in the market, and their exit could positively impact Bitcoin’s price.

Bitcoin Miners and AI

Some of the top Bitcoin miners have adapted their operations to meet the growing demands of the Bitcoin mining industry. According to Askew, Bitcoin mining companies are finding success by expanding into AI and high-performance computing.

On October 28, several mining stocks saw significant gains. Among the top performers was Singapore’s Bitdeer Technologies with a 24.4% increase. Other notable performers included IREN and Gryphon Digital Mining.

One of the top-performing Bitcoin miners who has benefitted from the early transition to AI is Core Scientific. The company’s stock has risen by a massive 312% since the beginning of 2024 and is currently trading at $14.20. Earlier this year, Core Scientific signed a 12-year deal with AI hyperscaler CoreWeave, potentially generating up to $3.5 billion in revenue. The company has now secured three contracts.

Before Monday’s opening bell, Jefferies analyst Jonathan Peterson issued a “buy” rating on Core Scientific. He commended the company’s impressive comeback story as it leverages its significant access to power to build AI-focused data centers.

Adam Sullivan, CEO of Core Scientific, also stated that the company plans for exponential growth in the coming year. He noted that signing up another 500MW or 1GW of deals over the next few years could potentially elevate the company’s value to $25 to $30 billion.

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unpluggedfinancial · 2 months ago

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The Imminent Bitcoin Supply Shock: What You Need to Know

In the world of Bitcoin, a significant event is looming—an event that could reshape how investors, institutions, and even everyday people view this digital asset. The Bitcoin supply shock is fast approaching, driven by increasing institutional demand and a continually decreasing supply of new Bitcoin entering the market. Understanding this imminent supply shock, and how it could influence Bitcoin’s future value, is crucial for anyone looking to navigate the evolving financial landscape.

Understanding Bitcoin’s Fixed Supply

Bitcoin is unique in that its supply is capped at 21 million coins, making it one of the few truly scarce assets in existence today. Unlike fiat currencies, which can be printed endlessly, Bitcoin’s supply is hard-coded to be finite. This scarcity is further heightened by the fact that every four years or so, a process called a halving occurs, which reduces the amount of new Bitcoin that enters circulation by half.

The 2024 Halving: The most recent halving occurred in 2024, reducing the block reward from 6.25 BTC to 3.125 BTC. This means that miners, who validate Bitcoin transactions, are now receiving half as much Bitcoin for the same amount of work, effectively slowing the influx of new Bitcoin into the market.

This process will continue until the year 2140, at which point no more new Bitcoin will be mined, and only the circulating supply of 21 million coins will exist. While that’s over a century away, the effects of Bitcoin’s decreasing supply are already being felt today.

Institutional Adoption and Its Impact on Supply

One of the key drivers behind the imminent supply shock is the increasing presence of institutional investors. Over the past few years, major corporations, hedge funds, and even some governments have begun accumulating Bitcoin as part of their long-term strategies.

Institutional Holdings: Large companies such as MicroStrategy, Tesla, and BlackRock have added substantial amounts of Bitcoin to their balance sheets. These institutions aren’t just buying Bitcoin to trade it—they’re holding it as a store of value, effectively removing large portions of the supply from circulation.

Long-Term Impact: Unlike individual traders, institutions often accumulate assets for the long haul. This means that the Bitcoin they purchase isn’t likely to return to the market any time soon, reducing the available supply and contributing to growing scarcity.

As more institutions jump on the Bitcoin bandwagon, the circulating supply available for everyday investors shrinks further, setting the stage for a supply shock—a period where demand far exceeds the available supply.

Why a Supply Shock is Imminent

Several factors are coming together to create the conditions for this supply shock, and it’s worth understanding why it’s not just a hypothetical event, but something that’s likely to occur sooner rather than later.

Continued Institutional Interest: More institutions are beginning to see Bitcoin as a hedge against inflation and economic instability. With governments around the world printing money at record rates, the appeal of a finite asset like Bitcoin grows stronger. As institutional demand increases, more Bitcoin will be taken off the market and held in reserves.

Decreasing Available Supply: Every Bitcoin halving event cuts the supply of new Bitcoin in half, but this reduction is now coupled with institutional buying. The amount of Bitcoin available on exchanges is shrinking, making it harder for people to buy Bitcoin without moving the price up.

Rising Global Adoption: Countries and companies around the world are warming to the idea of Bitcoin as a legitimate asset class. This isn’t just an institutional trend—retail adoption is increasing as well. As more people and organizations accumulate Bitcoin, the pressure on the already limited supply grows, pushing us closer to a supply shock.

The 2036 Inflection Point: Running Out of Bitcoin

A key moment in Bitcoin’s supply dynamics is approaching in 2036—a date that could be a major inflection point for the cryptocurrency. By that time, 99% of all Bitcoin will have been mined, leaving only 1% to be mined over the next century.

99% Mined by 2036: With each halving, the amount of new Bitcoin being created drastically reduces. By 2036, the Bitcoin network will have released 99% of its total supply of 21 million coins. This means that almost all of the Bitcoin that will ever exist will already be in circulation by that point.

The Final 1%: Mining the last 1% of Bitcoin (around 210,000 BTC) will stretch over the next century. With each halving event, the reward for miners is reduced by half, making it progressively harder to mine new Bitcoin. By the year 2140, when the fixed supply of 21 million Bitcoin is fully mined, the final mining reward will be just one satoshi (0.00000001 BTC). At that point, no new Bitcoin will be created, and miners will rely solely on transaction fees.

The halving mechanism ensures that, while Bitcoin will continue to be mined, the amount added to circulation each year will become negligible compared to the amount already in circulation. This creates an environment of extreme scarcity, where Bitcoin becomes a truly finite resource—more scarce than gold or any other asset known to humanity.

What Does This Inflection Point Mean?

When 99% of Bitcoin is mined by 2036, the remaining supply will be distributed more slowly than ever before. This moment marks a significant shift in Bitcoin’s supply dynamics because:

Price Pressure Will Increase: As the amount of new Bitcoin entering the market slows to a crawl, scarcity will drive up its value. By 2036, we can expect Bitcoin to be far more difficult to acquire, with a much higher price floor due to its rarity and institutional adoption.

Institutional Holdings Will Dominate: Since much of the available Bitcoin will already be in the hands of long-term holders and institutions by 2036, the remaining Bitcoin will be distributed among a much smaller pool of new buyers. This could create intense competition for the few Bitcoins that remain available for trading.

Scarcity Becomes Absolute: Once 99% of Bitcoin has been mined, the market will face a new reality—Bitcoin will become one of the most scarce and sought-after assets ever created. As institutions and investors scramble to secure a piece of this increasingly finite resource, the effects on price could be staggering.

Potential Outcomes of the Supply Shock

When supply is limited, and demand is growing, prices tend to rise. This is a basic economic principle that applies directly to Bitcoin. Here are a few potential outcomes of the looming supply shock:

Price Appreciation: With fewer Bitcoins available for purchase, and demand increasing, the price of Bitcoin is likely to rise. Historically, after each halving, Bitcoin’s price has seen significant upward movements. As we approach the point where supply truly begins to run dry, we could see even more drastic price increases.

Liquidity Crunch: A supply shock can lead to a liquidity crunch, where it becomes harder to buy Bitcoin without driving up the price significantly. As more institutions hold onto their Bitcoin long-term, there could be fewer coins available for trading, leading to thinner order books and sharper price movements.

Increased Scarcity: Bitcoin’s scarcity will only grow over time. As more entities hold onto their Bitcoin as a long-term store of value, the asset becomes increasingly difficult to acquire, adding to its allure as "digital gold." This scarcity is what sets Bitcoin apart from other assets and could make it one of the most valuable assets of the 21st century.

What This Means for Investors

For investors, the impending supply shock presents both challenges and opportunities. Here’s what to consider:

Long-Term Value Proposition: Bitcoin’s finite supply and growing demand make it an attractive asset for long-term investors. If the supply shock occurs as anticipated, those who hold Bitcoin could see substantial value appreciation over time.

Dollar-Cost Averaging (DCA): One strategy to consider is Dollar-Cost Averaging (DCA), which involves buying small amounts of Bitcoin regularly over time. This helps investors accumulate Bitcoin without worrying about short-term price volatility. Over the long term, this strategy can help you build a position before the full effects of the supply shock set in.

Hodling: Holding onto Bitcoin during periods of scarcity could be a powerful investment strategy. Those who understand the long-term value of Bitcoin’s scarcity are positioning themselves to benefit from future price appreciation as the supply shock unfolds.

Conclusion

In summary, the imminent Bitcoin supply shock is not a matter of "if" but "when." With decreasing new supply, increasing institutional accumulation, and growing global adoption, the conditions are ripe for a significant market shift. As Bitcoin becomes increasingly scarce, those who understand its value and act early could find themselves in a favorable position.

The 2036 inflection point—when 99% of all Bitcoin will have been mined—marks a critical moment in the timeline of Bitcoin’s journey. From that point forward, Bitcoin’s scarcity will become undeniable, and its value could appreciate significantly as demand continues to rise.

For investors, the key is to stay informed, consider strategies like Dollar-Cost Averaging, and most importantly, recognize that Bitcoin’s value is rooted in its finite supply. As the world continues to turn to Bitcoin as a hedge against economic uncertainty, the coming supply shock could prove to be one of the most important financial events of the next decade.

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bitcoincables · 1 year ago

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Crypto Executives Bullish on Bitcoin: Targeting $100,000 in 2024

Bitcoin's price is currently near its 18-month high at $44,000, and analysts and investors are rushing to put out higher price targets for the cryptocurrency. Many believe that Bitcoin could reach $100,000 by next year. Executives from the crypto industry, such as Michael Saylor from MicroStrategy, one of the largest Bitcoin holders, are confident that Bitcoin could double in value within 12 months. Saylor has not officially announced a price target for 2024, but he has mentioned that Bitcoin could increase by tenfold and has suggested that one day people will brag about buying five-figure Bitcoin. Other crypto executives and mainstream financial players, including Matrixport and Standard Chartered Bank, have also expressed bullish sentiment towards Bitcoin, with price targets of $125,000 and $100,000 respectively.

There are two major catalysts driving the optimistic outlook for Bitcoin. Firstly, the US market is expecting the approval of the first-ever spot Bitcoin ETF, which could attract a significant influx of institutional investor money into Bitcoin when it happens, potentially in early 2024. Secondly, the Bitcoin halving, scheduled for April 2024, is anticipated to further boost the price. In the past, the halving has led to substantial price increases, and the next halving is generating excitement among investors. However, it's worth noting that there are risks involved, such as the SEC's decision on the ETF and the possibility that the halving may not have the desired impact on price. Despite these uncertainties, the overall sentiment remains positive, with Bitcoin having the potential to double in value in 2024 and reach the $100,000 mark.

While the path to $100,000 seems promising, there are still potential obstacles that could impede Bitcoin's growth. The SEC's potential rejection of a spot Bitcoin ETF could have a negative effect, considering the significance of this development. Additionally, the Bitcoin halving may not generate the expected results, which could dampen bullish forecasts. However, considering the significant growth Bitcoin has already experienced this year, with its value more than doubling, a target of $100,000 for 2024 seems reasonable. Overall, the long-term outlook remains positive for Bitcoin.

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dayppx-1 · 1 month ago

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DAYPPX: The Long-Term Impact of Global Macroeconomics and the Rise of BRICS on the Bitcoin Market and Volatility Analysis

In 2024, Bitcoin remains at the center of the global financial stage, particularly during its halving year, a period typically marked by significant price surges. However, this time around, the market has bucked historical trends, entering a prolonged consolidation phase. Meanwhile, shifts in the global macroeconomic environment, such as record highs in the S&P 500 and rising inflationary pressures, have introduced new dynamics into the crypto market. Against this backdrop, global wealth management firms and institutional investors are increasingly focusing on Bitcoin, forecasting the next decade as a critical period for its development. DAYPPX offers professional insights into these changes and explores their implications for platform users and investors.

DAYPPX: The Consolidation Phase and Development Trends of Bitcoin for the Next Decade

The performance of Bitcoin in 2024 has been notable, particularly its prolonged consolidation phase post-halving, which has captured the attention of investors and market analysts alike. According to data from CryptoQuant, Bitcoin has been consolidating for 176 days, setting a new record for halving years. DAYPPX observes that if no significant upward movement occurs within the next 14 days, this consolidation phase could extend further. This is not only a test of market patience but also a severe challenge for the price trajectory of Bitcoin.

Historically, the performance of Bitcoin during halving periods has varied significantly. In 2020, the return index of Bitcoin reached 4.05, indicating a robust post-halving performance, whereas the 2016 halving saw a more modest return index of 2.26. This contrast highlights that while halvings often come with price surge expectations, actual market behavior is influenced by a range of factors and does not always meet optimistic projections.

Nevertheless, in 2024, Bitcoin reached an all-time high of $73,737.94 before the halving, marking the first time it has set a record high before rather than after a halving event. This milestone has heightened market anticipation, especially as the current 176-day consolidation suggests a reaccumulation phase. Analysts predict that if this phase continues, it could stretch to 236 days, making it the longest reaccumulation period during a halving year.

From a global wealth management perspective, the potential of Bitcoin is poised for unprecedented growth over the next decade. BlackRock has noted that Bitcoin is increasingly transcending governmental influence, a view traditionally held by Bitcoin maximalists but now gaining traction among mainstream financial institutions. Currently, less than 1% of global wealth management firms have exposure to Bitcoin, indicating that its potential remains significantly underestimated. Over the next ten years, as more wealth managers incorporate Bitcoin into their balance sheets, the market could witness a "wild decade" of growth.

Simultaneously, Bitcoin ETF inflows have emerged as a critical market driver. Last Friday alone saw net cash inflows into ETFs exceeding $348 million, with BlackRock contributing $140.7 million and Fidelity adding $117 million. This influx not only reflects heightened institutional confidence in Bitcoin but also directly reduces market supply—over the past week, Bitcoin supply shrank by 10,000 coins, while Ethereum supply fell by 24,600 coins within just 24 hours. DAYPPX believes this rising market demand is providing price support around the crucial technical level of $66,000. A breakout above this level could trigger further upward momentum.

DAYPPX: Macroeconomic Environment Fuels Market Interconnectivity

The market volatility of Bitcoin is not solely driven by internal factors; the macroeconomic environment also exerts a significant influence on its price movements. In 2024, the S&P 500 hit an all-time high of 5,819 points, reflecting the robust performance of the traditional financial market. Simultaneously, Bitcoin rose by 3%, reaching $62,400. This parallel movement highlights the increasing interconnectivity between the crypto market and traditional financial markets, particularly as macroeconomic factors and investor sentiment play a larger role.

DAYPPX notes that over the past year, the market capitalization of the S&P 500 grew by $13 trillion, with forecasts for a 30% increase in 2024, marking the largest annual gain since 1997. This impressive recovery in equities has indirectly bolstered confidence in the crypto market. The monetary policy of the Federal Reserve, especially 0.5% rate cut of last month, has had a notable impact on market sentiment, lifting both traditional and crypto assets. Current data shows an 88% probability of another rate cut in November, which could further support Bitcoin and other cryptocurrencies.

In addition, rising inflationary pressures have become a key driver of the market appeal of Bitcoin. The U.S. Producer Price Index (PPI) for September came in at 1.8%, exceeding expectations of 1.6%, signaling persistent inflation concerns. In this environment, investors are increasingly seeking safe-haven assets, with the role of Bitcoin as an inflation hedge becoming more prominent. DAYPPX highlights that as traditional currencies lose purchasing power, assets with scarcity and value-preserving qualities, such as Bitcoin, become even more attractive.

Moreover, shifts in the global macroeconomic landscape are creating new opportunities for Bitcoin. BRICS countries are expected to grow at an average annual rate of 4.4% between 2024 and 2025, far outpacing the 1.7% growth rate of G7. BRICS nations now account for 36.7% of global GDP, and the inclusion of new members like Saudi Arabia, Iran, and the UAE further enhances the influence of the group in global markets. This economic expansion is not only reshaping energy markets but also posing new challenges to the stability of the global financial system.

DAYPPX: Short-term Bitcoin Market Fluctuations and Event Analysis

DAYPPX points out that specific events in the Bitcoin market often trigger short-term fluctuations, even though their long-term impact may be limited. For instance, the recent decision to delay Mt. Gox repayments until 2025 has eased concerns about a potential Bitcoin oversupply. While 44,900 Bitcoin remain in the Mt. Gox wallets, the repayment postponement has temporarily mitigated the risk of a large influx of Bitcoin into the market, providing a buffer for price stability.

At the same time, the technical support levels of Bitcoin have shown resilience, with the recent support at around $62,400 reflecting strong buying demand. DAYPPX emphasizes that the key price levels to watch are the resistance points at $63,900 and $65,000. If these resistance levels are breached, larger price movements could follow. However, if Bitcoin falls below the $60,200 support level, short-term downward pressure may arise.

Furthermore, the current reaccumulation phase for Bitcoin has lasted 176 days and may extend to 236 days, making it the longest consolidation period during a halving year. This signals a period of price consolidation, with the market awaiting future volatility. These short-term events and technical factors have a significant impact on the price trajectory of Bitcoin, revealing clear phases of market fluctuation. DAYPPX continues to provide users with timely market information, helping them navigate the complex dynamics of the market and monitor the potential effects of these factors.

#DAYPPX #bitcoin

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lowendbox · 2 months ago

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How Bitcoin Miners Are Becoming the Essential Power Source for AI Data Centers

Following the Bitcoin reward halving earlier this year, which reduced mining profits by 50%, many cryptocurrency miners are turning to artificial intelligence (AI) business models. In light of the cryptocurrency market’s volatility, Bitcoin miners are adapting their existing infrastructure to serve the data storage and computing needs of the AI sector. This transition not only provides a more stable and predictable revenue stream for firms operating in the mining industry, but it could also yield substantial benefits for the wider technology landscape. Energy has become a critical commodity in the AI industry due to the soaring demand for heavy-duty computing capacity. This is driven by AI applications such as ChatGPT, which reportedly require 10 times more energy than a standard Google search. To address this growing demand, AI companies are actively on the hunt for affordable power sources and large expanses of land for data centers. Having sufficient power available now is vital when considering it takes years to build high-performance computing (HPC) data centers from scratch, with current wait times for electrical-grid connections extending up to six years. In the industry’s favor, Bitcoin miners’ expertise in leveraging advanced equipment and securing substantial, low-cost energy makes them highly valuable partners for powering AI-driven data centers. In Bitcoin’s early days, miners discovered that expanding their computer rigs significantly boosted their profits, leading them to build vast server farms that harnessed cheap energy sources and operated around the clock – this is the scale that the AI industry is now seeking. Additionally, the advanced infrastructure developed by some Bitcoin miners, originally designed to solve complex cryptographic puzzles, is equally capable of handling the computationally intensive tasks required by AI. While not all mining rigs meet the standards of data center-grade infrastructure, more advanced miners have a proven track record deploying state-of-the-art technologies and engineering solutions like direct-to-chip cooling to get the best possible performance out of hardware. This capability enables Bitcoin miners to diversify their revenue streams and maximize returns on their investments. Many mining companies are already capitalizing on this opportunity. For example, Core Scientific (CORZ) has announced a partnership to host over 200 MW of graphic processing units (GPUs) for the AI startup CoreWeave. This contract is expected to generate net profits of approximately $3.78 billion, reflecting a 71% return. It’s clear that such collaborations can be a win-win situation as AI companies benefit from the infrastructure Bitcoin miners provide, while miners gain from the stability and potential profitability of AI computing revenue amid the current AI boom. With AI-driven data centers expected to account for 3% of the nation's electricity by 2026, and Bitcoin mining already consuming up to 2.3% of the nation’s electricity, their combined impact could lead to even greater energy demands and environmental consequences. Together, these two sectors could significantly strain the power grid and contribute to increased carbon emissions. In fact, the International Energy Agency (IEA) reported that data centers in the US will consume twice as much electricity by 2026, largely driven by the demands of cryptocurrency mining and AI. To reduce these risks and ensure a sustainable partnership, Bitcoin mining operations need to invest in renewable energy sources, including wind, solar, and hydroelectric power. New research suggests that integrating Bitcoin mining with green hydrogen could facilitate a faster transition to clean energy, potentially increasing the capacity of solar and wind power installations by up to 73%. AI technologies can also play a crucial role in enhancing sustainability by optimizing renewable energy usage, dynamically adjusting energy sources based on availability and cost to reduce carbon footprints. Notably, Bitcoin miners have experience leveraging renewable energy sources and demand response programs to deliver enhanced grid stability. As a uniquely curtailable load, Bitcoin mining is suited to active power management. This improves grid stability and helps support the usage of intermittent energy sources such as wind and solar. Flexible usage means renewables can be maximized, rain or shine. While some AI workloads are not curtailable to the same extent, the strategies and relationships developed by miners can help them ensure grid stability even as their overall energy usage increases. As Bitcoin mining evolves to support AI’s data and computing needs, prioritizing sustainability is essential. At the same time, we must not overlook the importance of establishing and adhering to regulatory frameworks. By implementing effective regulations, we can balance innovation with sustainable practices reasonably, ensuring technological advancements do not come at the expense of the environment. For instance, Germany has been at the forefront of enacting regulatory frameworks like the German Energy Efficiency Act. This legislation introduced new rules on energy efficiency, energy reuse, power supply from renewable energies and energy management systems – all intended to make the operation of data centers more sustainable. Implementing similar regulations that align technological advancements with sustainable practices can significantly help alleviate strain on the power grid and reduce energy consumption, while ensuring that growth benefits both the energy sector and broader business objectives. Ultimately, achieving sustainability in AI-driven and Bitcoin mining operations requires a collaborative effort between government and industry players. As these new partnerships develop, they promise benefits for both sectors. However, we must remain committed to reducing energy consumption and mitigating the impact on the power grid. By working together, we can ensure that these technological advancements drive progress while also supporting environmental stewardship. LowEndBox is a go-to resource for those seeking budget-friendly hosting solutions. This editorial focuses on syndicated news articles, delivering timely information and insights about web hosting, technology, and internet services that cater specifically to the LowEndBox community. With a wide range of topics covered, it serves as a comprehensive source of up-to-date content, helping users stay informed about the rapidly changing landscape of affordable hosting solutions. Read the full article

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coineagle · 12 days ago

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Could XRP and Other Altcoins Eclipse Bitcoin’s Reign?

Key Points

Bitcoin’s dominance is a key indicator for future altcoin trajectories, with its recent surge to a new all-time high of $93K.

Despite Bitcoin’s consolidation below $90K, historical patterns suggest a potential altcoin rally in the coming days.

Bitcoin’s dominance is a crucial metric for predicting the future trends of alternative cryptocurrencies, or altcoins. Recently, Bitcoin and altcoins have been emerging as two distinct asset classes.

Many industry analysts have observed that this market cycle differs from previous ones, as it has transitioned from speculative trading to a more sustained, fundamental-driven rally. This optimism stems from the belief that the next phase of Bitcoin could potentially lead to a bull run reaching $100K.

Factors Influencing Bitcoin’s Surge

Within a week, Bitcoin surged to a new all-time high of $93K, with its market dominance reaching approximately 70%. This was influenced by a variety of factors including post-election liquidity, Federal Open Market Committee (FOMC) rate cuts, and the impact of the post-halving event.

However, speculative pressure has appeared, preventing Bitcoin from reaching its target, as it has now consolidated below $90K for two consecutive days. This consolidation at this “high-risk” range could potentially signal a shift of capital from Bitcoin to other lower-risk assets.

Altcoins Poised for Breakout?

Historical patterns from previous market cycles suggest a 230-day pattern following Bitcoin halvings. After the initial post-halving bull run, which often drives Bitcoin dominance to new highs, market participants tend to look to altcoins for additional profit opportunities.

In 2020, the supply shock caused by the post-halving event materialized within the first 150 days, with Bitcoin reaching $40K for the first time. However, as Bitcoin’s momentum slowed, altcoins began to outperform, with many posting significant gains about 60 days later.

Similarly, this year’s April halving, which reduced the miner reward to 3.125 Bitcoins, triggered an economic imbalance. This caused a sharp increase in demand, while the reduced supply led to tighter market conditions.

The resulting lower liquidity, combined with Bitcoin’s controlled supply, has created the perfect setting for pushing Bitcoin dominance near 70%, further fueling its rise to a new all-time high.

If this trend repeats, many altcoins could be poised to break past major resistance levels before the end of Q4. With Cardano gaining significant traction, this further reinforces this theory.

Evidence Supporting the Theory

Bitcoin’s consolidation below $90K reflects a growing ‘risk-averse’ sentiment in the market. Despite bulls countering bearish pressure, the failure to trigger a parabolic run raises concerns.

In other words, the hesitation to break key resistance levels suggests that Bitcoin’s dominance may be stalling, creating an ideal environment for investors to diversify into high-cap tokens.

As a result, in the last 24 hours, as Bitcoin posted an approximately 4% decline, dropping to $86K, major altcoins reaped the benefits, with XRP alone gaining over 15%.

Therefore, unless Bitcoin dominance rebounds, supported by both institutional and retail backing to solidify BTC’s long-term prospects, altcoins may continue to dominate the gainer charts.

However, on the flip side, altcoins could experience short-term gains if Bitcoin dominance climbs back to near 70%. Yet, a full-fledged altcoin season might remain limited, raising the critical question: Will Bitcoin regain its weakening dominance?

On the monthly RSI, Bitcoin dominance has entered overbought territory, signaling a potential correction. This could indicate that the dominance of Bitcoin may soon experience a pullback, possibly paving the way for altcoins to gain traction.

Meanwhile, institutional support for Bitcoin is weakening, as major players exit the cycle after locking in massive gains from this bull run. For Bitcoin dominance to regain control, these players are likely waiting for a “dip,” where prices are more feasible for re-entry.

Until then, it presents a prime opportunity for bulls to capitalize on an altcoin rally. With historical patterns supporting this trend, altcoins look set to break key resistance levels in the coming days, potentially triggering an altcoin season by the end of Q1 next year.

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