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Some food for thought...

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jrcornel
80
2 months ago2 min read

If inflows stay the same on average, bitcoin is going a lot higher after this next halving

Since 2017, bitcoin has had an average price of roughly $7k per coin.

Based on the emission rate since that time, bitcoin has needed roughly $400 million of monthly inflows just to maintain that price (all things being equal).

Obviously some months there was more selling than others, which required more or less fiat inflows to maintain prices, but on average it has needed roughly $400 million per month to keep that $7k average number over the past 3 year.

Also that average number has varied wildly as you know, from a low of around $1,200 at the beginning of 2017 to a higher of around $20k by the end of the same year.

So, it's hardly as cut and dry as we are trying to make it sound for this example...

Go with it for a minute...

However, all that being said, we are about to embark on the next halving event, which is going to change things in a major way.

As I typed it is roughly 1 month away.

Current estimates have it slated to take place on May 13th.

At that time, the inflation rate will be cut in half.

That means that it will only take roughly $200 million of fiat inflows to maintain the same $7k average price going forward.

However, if we keep up the same $400 million average inflows over the past 3 years, what do you think happens to the price of bitcoin?

Moon time.

(Source: https://bitcoinexchangeguide.com/crypto-investors-wonder-if-when-lambo-and-when-moon-times-are-over-for-bitcoin/)

This is basically the entire investing thesis for why the halving matters so much...

If the demand is relatively flat, and new supply is cut in half, prices go up.

Even if demand drops, as long as it doesn't drop as much as as the new emission rate decreases, prices go up.

Basically, if we can keep at least half the current demand level, or higher, the price of bitcoin is going to go up.

At this point, with everything going on in the world, I like our chances.

Stay informed my friends.

-Doc

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