Bitcoin completes its fourth halving… what history suggests happens from here… the additional tailwind behind crypto today… Luke Lango’s quantitative approach to altcoins
The fourth Bitcoin halving is now in the record books, having taken place last Friday.
What shall we do now?
In short, prepare for weakness/sideways action that frustrates many “me too” investors, and then a major rally.
Let’s flesh this out.
First, if you are new to the field Digest, Halving is a Bitcoin-specific event where “miners” (think, computer geniuses) solve complex computer puzzles to release new Bitcoin. Their reward for doing this is an amount of Bitcoin already built into the algorithm. Each halving reduces this reward by half, hence the name “halving.”
The previous three halvings were very bullish for the Bitcoin price for months, on both sides of the event. But right around the event itself, there is usually a significant drop in prices.
This time was no different.
Since hitting a new all-time high of $75,830 in March, Bitcoin has fallen about 20% to $60,000. As of this writing Monday morning, it is trading at around $66,100.
What history suggests is on the other side of this weakness
For these details, let’s turn to our cryptography expert, Luke Lango:
Bitcoin soared from January to April. Today, in the fourth halving, BTC is moving backwards.
This is entirely consistent with historical behavior around halving events…
The good news is that, during both the second and third boom cycles, the massive sell-off that preceded the halving did not last long.
To get a sense of this, let’s take a trip down memory lane to previous Halvings.
In each cycle, Bitcoin consolidates for a few weeks before starting to climb around two months after the Halving event.
From there, Bitcoin never looked back in either cycle – 2021 or 2017.
Before the second Bitcoin halving in July 2015, the value of Bitcoin had fallen by 18%. Similarly, before Bitcoin’s third halving in May 2019, it saw a 14% decline.
Following both events, Bitcoin not only recouped these losses but also embarked on a monumental rise over the following 12 months.
After the second halving, the value of Bitcoin increased astonishingly 284%. After the third halving, it was catapulted by an even more stunning trend. 559%.
This cycle of strong recovery before the halving, followed by a sudden slowdown just before the halving, is a well-established trend. This is the norm, not the exception.
Unfortunately, as noted at the top of this document Digestmany “me too” investors lose conviction during this downturn, selling just before Bitcoin begins to rise.
Here is Rekt Capital with more:
THE [retracement around the time of the halving] investors are wondering if the halving was ultimately a bullish catalyst for prices.
The pre-halving retracement is followed by a multi-month reaccumulation.
Many investors are shaken at this point due to boredom, impatience, and disappointment over the lack of major results in their BTC investment immediately after the halving.
Once Bitcoin exits the reaccumulation zone, it enters the parabolic uptrend. It is during this phase that Bitcoin experiences accelerated growth en route to new all-time highs.
Why “me too” investors should be extra vigilant to avoid being shaken this time
There is one key difference in this latest crypto boom cycle: it has institutional support.
Last January, for the first time, the SEC approved the first U.S.-listed exchange-traded funds (ETFs) to track bitcoin. This was a watershed moment, allowing huge institutional players to enter the crypto sector.
The January decision gave the green light to Bitcoin ETFS from BlackRock, Ark Investments/21Shares, Fidelity, Invesco and VanEck. This opened the door to massive capital inflows that we hadn’t seen in previous booms.
Here is Bloomberg from a few weeks ago:
Add this mind-blowing statistic to the list of superlatives driving the latest crypto boom cycle: A record $520 million was pumped into BlackRock Inc.’s Bitcoin ETF in a single day.
The iShares Bitcoin Trust (ticker IBIT) saw its largest single-session haul on Tuesday, marking the largest daily inflow so far among the batch of new U.S. exchange-traded funds investing directly in the world’s largest cryptocurrency. world. It is also the second largest daily contribution for all American ETFs, all asset classes combined…
And here is perhaps the most optimistic detail of all…
The rise in the price of Bitcoin before this latest halving probably reflects the position taken by a handful of institutional investors. We will likely see more professionals moving into this field as this year continues. This means that the post-halving boom has the potential to surprise on the upside this time around in terms of potential gains.
Here is Stéphane Ouellette, Managing Director of FRNT Financial, an institutional platform focused on digital assets:
THE [pre-halving rally back in March] seems to be mainly influenced by BTC ETFs.
Some estimates suggest that fewer than 20% of investment advisors have been approved by their firms to offer this product to their clients. This is a process that should take place over a year.
Given the potential for a next wave of institutional dollars, what is the price target for Bitcoin?
As you can imagine, estimates are all over the place, but here’s a perspective from The Washington Post:
“We expect Bitcoin price to show strong performance over the next 12 months,” said [Bitwise senior crypto research analyst Ryan Rasmussen].
Rasmussen notes that he’s seen some predict gains as high as $400,000, but the most consensus estimate is closer to the $100,000 to $175,000 range.
While history suggests that Bitcoin will see a triple-digit rally in its future, the outlook for altcoins is even more optimistic.
Altcoins are simply “alternative coins”. Basically, it is any cryptocurrency other than Bitcoin.
Let’s get back to Luke for why altcoins could treat your crypto capital much better than Bitcoin from here:
Bitcoin always dominates the “first halves” of expansion cycles, or the 12 months before a halving. Meanwhile, BTC dominance is increasing as BTC leads the way and altcoins lag behind.
This is indeed what happened this time. Over the past 12 months, Bitcoin has led and altcoins have generally been laggards. Again, very typical.
But, in the second half of boom cycles – or the 12 months following a halving – altcoins always take the lead. They tend to regain momentum immediately after the halving, before fading a bit, then completely disappearing around seven to eight months after the halving.
To illustrate the firepower potential of altcoins, Luke provided some stunning detail.
The third halving took place in May 2020. By the end of the following year, more than 70 of the top 300 altcoins had seen their value skyrocket by more than 1,000%.
That’s nearly 25% of major cryptocurrencies seeing gains of 1,000% or more over about a year and a half.
If you’re looking for the best way to redeem that fourth half, join Luke tomorrow morning at 10 a.m. Eastern.
One of the biggest criticisms of altcoins is that they possess no intrinsic value. “What are they doing?” “Where does their value come from?” and “Why are they needed?”
Questions like these are usually the predicate of the real underlying question: “Without a good way to price an altcoin because you don’t know its value, how do you choose which ones are most likely to increase ? »
This is where Luke and his team believe they have an advantage:
My team and I have spent the last several years developing a powerful quantitative system that discovers stocks before their prices skyrocket. We have already implemented this phased quantitative analysis system in several of my inventory departments.
But now, in addition to stocks, we will use it to identify cryptocurrencies in the early stages of major technical breakthroughs.
Frankly, over the past few months this quantitative system has been kicking and taking names with stocks.
In the first quarter of 2024, we used this system to record partial profits of approximately 110%, 55%, 77% and 94% on four of our stock positions.
All of this progress happened in a matter of months. Some only took a few weeks.
Tomorrow morning at 10 a.m. Eastern, Luke will detail how the system works, provide back-test results to illustrate how it detects booming altcoins, and he will even name an altcoin that the system just flagged.
You can automatically reserve your place for this free event by clicking here.
I’ll give Luke the last word today:
Based on our back-test results of this system, you could have done 1,929% Since Bonk (BONK-USD), 873% Since Apex Token (APEX-USD), And 1,945% Since Moon Tropica (CAH-USD), in just 12 weeks this year.
And tomorrow morning, I will reveal it to the public for the first time…
The current crypto rally, fueled by a halving, is already generating 1,500 new millionaires every day. And my new system is the best way to become one of them. It allows you to benefit from the greatest upside potential of altcoins while minimizing downside risk.
Reserve your place now.
Have a good evening,
Jeff Remsburg
