BTC halving affects geometry?

BTC is expected to officially halve on May 12, 2020. As the halving date approaches, various theories and analyzes about BTC halving emerge in an endless stream. Chain Tower Think Tank briefly discusses some of these theories and their impact. Chain Tower Think Tank believes that BTC halving is a resounding slogan. Accompanied by BTC halving is a series of words such as BTC soaring, wealth freedom, and deflation. Together, they constitute an important value theory of BTC halving or BTC. Deflation causes prices to rise. In other words, a finite and planned supply of money or goods eventually leads to higher prices. Chain Tower Think Tank reviewed three common theories about the value of BTC, and finally believed that the halving has little impact on the value of BTC and users need to be careful. At present, three theories are mainly used in the market, namely miner’s price theory, BTC’s scarcity theory, and digital gold theory, to discuss the impact of BTC halving on the price. The starting points of these theories are different. Starting with decision-making, what is discussed is the issue of supply. Scarcity and gold theory, these two theories start with demand, but there are still some differences between the two. The gold theory may emphasize the value storage and hedging function of BTC, although after the sharp drop on 3/12, the hedging risk has been widely questioned. In addition to these theories, we cannot ignore the fundamental value of BTC as a means of payment, but this part may only make a small contribution, and the use of Lightning Network may increase the value of this part. The miner's price theory The miner's status is quietly changing The core of the miner's price theory is to emphasize the impact of miners buying and selling Bitcoin on the price. When the price falls, the corresponding statement is the miner's surrender theory. Specifically, it means that the miners are bearish on the price of BTC in the future, so Choose to sell the relevant BTC. In the adjustment period, the theory of miners has changed to the theory of miners' cost. Miners will not allow the price of BTC to be lower than the cost of mining for a long time. The theory corresponding to the rise of BTC prices may be the theory of miners' participation. Being invested in the BTC network indicates that it will rise in the future. Data: Purpose Bitcoin ETF increased its holdings by 70.59 BTC: According to data from OKLink, as of 10:00 today, the number of BTC held by Purpose Bitcoin ETF was 21184.63, an increase of 70.59 BTC from the previous day; Purpose Ether ETF held The number of ETH is 58681.13, which is 507.02 ETH less than the previous day. [2021/6/25 0:05:09] Regardless of whether these statements are reasonable, or whether the assumptions behind these statements are in conflict, the first thing to be clear is that the influence of miners on the market may be decreasing. Due to the BTC issuance mechanism , the number of newly mined BTCs by miners is decreasing, while the number of BTCs circulating in the market or stored in exchanges is undoubtedly increasing. With the departure of old miners and the addition of new miners, the proportion of BTC in the hands of miners to all circulation may be decreasing, so miners have gradually become price takers rather than leaders. Compared with the previous halving operations, the professionalism of the entire mining industry has been further deepened, and the mining machine manufacturers, mine managers, mining service providers, pledge lending and other participants have become more differentiated and their operating models have become increasingly Professional, the capital turnover and price risks that miners have to face are decreasing. They can solve their own capital turnover problems through borrowing and other models, and solve the price risks faced by mining through derivatives investment. Cloud mining machines are equal to users. A swap is signed and the corresponding price is locked. Therefore, for miners, compared with previous halvings, the maturity of the industry may be far higher than in the past. This maturity not only facilitates miners to carry out corresponding operations and hedge risks, but also makes the flow of BTC more convenient. . This flow may further reduce the influence of miners on BTC prices. BTC breaks through 64,000 USDT, continuing to set new historical highs: BTC breaks through 64,000 USD/piece, continuing to set new historical highs. [2021/4/14 20:18:09] The core impact of halving on miners is to reduce output. Since the daily income of miners is equal to the number of BTCs mined * the price of the day, halving can also be replaced by another One way of saying: the price is halved, and the miners' response to the halving can be observed through the halving of the price. After the sharp drop on March 12, the computing power reached a low point of 85E on March 20, and the current computing power on BCH or BSV is still too small. From the perspective of computing power changes, the replacement is not obvious, so the chain For the changes in computing power after the halving, Tower Think Tank predicts that when the price remains above $8,000, the total computing power should be around 80E. Most of the reduced computing power should come from the elimination of old mining machines. The prediction in the white paper: transaction fees will become the core of miners' income. This prophecy is currently less likely, but there is room for further rise, which should be able to make up for the loss of a part of the block reward halving. For mining machine manufacturers, the situation may be more difficult. Due to the arrival of halving, the original mining machines need to be eliminated, and there are still doubts about whether the new mining machines can take over. The latest Antminer 17 series mining machines have a large For scale quality problems, the damage rate is as high as 20%-30%. The cause of the failure is concentrated in two points. One is that the heat sink is loose or shifted, which leads to a short-circuit shutdown of the hash board, which in turn causes the mining machine’s computing power to drop sharply. The second is the failure of the power supply fan, which leads to a shutdown of the power supply. Voice | CME official: Nearly 300 BTC futures trading accounts have been added this year: CME official tweet said: "On February 19, the number of open Bitcoin futures contracts on CME reached a record of more than 62,000. As of February 24, nearly 300 new trading accounts have been added this year.” [2020/2/26] Jianan Zhizhi is due to the delay in mass production of 7nm chip mining machines, insufficient supply of 8nm chip production capacity, and spot supply Very nervous. According to its financial report, the annual operating income in 2019 was approximately US$204 million (approximately RMB 1.423 billion), a year-on-year decrease of 47.41%. The net loss in 2019 was approximately US$149 million (approximately RMB 1.034 billion). ). For mining machine manufacturers, how to accelerate the transformation may be a more core issue. Finally, let’s talk about the price. To be honest, the role of miners in promoting prices is limited, because the issuer of miners’ BTC, or each BTC is produced by miners through calculations. Miners cannot generate demand, but Miners control the supply through Hodl, but the strength of this control is gradually weakening at present. Just as we mentioned in the article that miners are gradually becoming price takers rather than price leaders, miners will not be the core promoters of BTC prices. Scarcity theory supply-led market? The discussion of scarcity is timeless. Through the description of scarcity, evangelists (those who use this term are generally full of controversy) hope to influence people to accelerate the purchase of BTC, thereby creating demand. The core logic of scarcity lies in a thing Very scarce => its value will rise in the future => you should buy it now, this logic is ingenious because it is a positive feedback loop, as long as people continue to believe, the value will continue to rise, and this logic will be repeated confirm its reasonableness. However, the market established by the consensus of market participants is also fragile. In the long run, new assets must always enter, otherwise the feedback will be difficult to sustain. Voice | Craig Wright: BCH should not be used for gambling BTC is not an "anarchist currency": According to Ambcrypto, nChain Chief Scientist Craig Wright recently appeared in a video hosted by Tone Vays to talk about the upcoming hard fork. He accused Bitcoin Jesus Roger Ver of using BCH for gambling. He argued that Bitcoin was designed to "work within the law," not "anarchist money." Bitcoin plays the role of money, and money doesn't break laws or do anything else. Regarding Roger Ver's ideas about money, Craig Wright stated that the idea of ​​"being able to make things illegal" makes Bitcoin itself illegal. [2018/11/12] If the source of new funds is simply divided into individuals and institutions, the amount of personal assets and the degree of participation of institutions will be two important dimensions. It may be easier to understand loose bulls from this perspective. The looser interest rate level makes it easier for individuals to carry out financial activities to a certain extent and further reduces financing costs for institutions. The high volatility of Bitcoin may attract Some investors who have a preference for this. At present, more and more institutions are entering the Bitcoin market, thanks to the entry of exchanges such as Bakkt and CBOE, which provide corresponding channels for traditional financial institutions to enter the market. Recently, a large number of articles use the S/F ratio to demonstrate the scarcity of Bitcoin, and even try to explain that the value of Bitcoin will rise further from this scarcity. First, use the S/F ratio to illustrate that the scarcity of Bitcoin is acceptable. The S/F ratio refers to the ratio of inventory to production. If the S/F ratio of a commodity is 10, it means that it will take ten years The production can only double the inventory. From this point of view, this scarcity is essentially a scarcity based on supply, not a scarcity determined by both supply and demand. So if we say from the S/F ratio It is possible to explain scarcity, but it is not comprehensive, and it is not appropriate to use S/F to predict prices. As far as the conclusion is concerned, halving is an important feature of BTC, but whether it will affect the scarcity and then affect the price, perhaps you can ask yourself how the BTC circulation in 2012 is compared to the current circulation, and what is the price. Analysis | Golden Disk: BTC futures contract position changes: Comprehensive analysis of the golden disk: 61% of OKEX’s BTC futures contracts are long accounts, 38% are short accounts, and the main bulls increase their positions significantly; the average long position of the main force is 42.2%, and the average short position The position ratio was 14.9%, and the long position increased greatly. [2018/8/14] Digital Gold Theory HODL! ! ! On the basis of scarcity, digital gold puts more emphasis on BTC for hedging risks and preserving value. Using S/F to demonstrate scarcity, and to demonstrate the similarities between BTC and digital gold from various angles, these may be able to prove that BTC is digital gold, but this seems to only explain the intangible value, and it falls on the price. First of all, gold is by no means a good investment target. Its price increase has been small in the past two decades or even ten years. Secondly, gold is more of a safe-haven asset, and it may be more inclined to more extreme risks. Finally Gold does not halve. These factors may explain why the price of gold is stable in the long run, while the price of BTC is so volatile. The core problem of halving is that it only reduces the supply side without any change on the demand side, which leads to short-term price increases but then falls immediately. We don't expect any surprises this time around. The hedge narrative was busted in the March 12 crash, and gold has performed poorly as a hedge in March, if anything. In fact, many studies on the hedging properties of BTC do not regard BTC as a hedging asset but a hedging asset, so there may be a certain deviation in our positioning of BTC at the beginning. However, under certain conditions, BTC can indeed undertake a part of the hedging function, but from the current observation, this part of hedging does not seem to bring much improvement to the price. BTC is an asset that can be used for payment. When the domestic currency performance is sluggish, users who cannot access foreign currency assets are likely to pin their hopes on BTC. Since BTC is difficult to control, it is likely to increase the demand for BTC in the short term. Since 2018, there have been relevant reports in Turkey, Brazil, and Argentina, indicating that the local BTC search-ethexc volume and transaction volume have increased significantly, but it seems that the effect on the price increase is not obvious. Value preservation is a theory full of words. The most common words are how much the investment in BTC has increased since a certain month in a certain year, exceeding all kinds of assets in the world (this sentence is the key point), and value preservation can be exchanged for thousands of words. into one word 'Hodl'. As for halving and digital gold, it can only be said that the characteristic of halving makes BTC more like digital gold, and whether halving occurs or not has nothing to do with whether BTC is digital gold. So halving has no effect on digital gold. Therefore, the conclusion is basically clear. The impact of halving on miners may be huge, but the real impact on the price of BTC may be negligible. The most likely price trend is that the price will reach a high point before and after halving, and then decline , the high point will not exceed the highest value in 2019, and the decline should not fall below $7,000. Lightning Network future hope? The advancement speed of the Lightning Network network in the past two years is gratifying. On the one hand, the BTC network has become more and more congested and there has been no major technological progress. On the other hand, the technology of the Lightning Network has become more mature. . But judging from the current situation, there is still a little distance from large-scale use. The adoption of the Lightning Network can indeed reduce the pressure on the network, but it may further reduce the income of miners from transaction fees. The impact on the entire BTC ecology remains to be seen. Conclusion Seriously, you lose After years of hard work, it has become obvious that BTC is the only one among all encrypted digital currencies. Even if other currencies are stronger than BTC in any other way, in the end, BTC still dominates in terms of market value. the whole market. Therefore, the current market status of BTC is likely only because it is BTC. If Satoshi Nakamoto named it TTC at that time, then TTC has the highest market value now, and in such a market, halving Where is the meaning? Looking back, BTC has not had particularly huge good news for a long time. Important technical progress has not appeared for a long time since the adoption of witness isolation, and BTC’s transaction processing efficiency has not made much progress. Halving is the only major BTC event in the near future. From this perspective, the BTC halving is more like a carnival for all parties in the industry, fully mobilizing the emotions of all parties to welcome the halving or a long cooling-off period in the future, but if you really want to take the halving seriously, it may not be possible. So wise.

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