Hello, Power Profit Traders!
John F Kennedy once said in a 1963 speech, “a rising tide floats all boats.”
His statement may have been directed at the cooperation of countries, but it also holds true in the markets – including the Crypto space.
You’ve probably heard or will hear more about the upcoming Bitcoin “Halving Event,” and I want you to know what it means as we take advantage of the event.
Historically, the Halving Event has created a huge benefit for the Cryptocurrency arena.
My Microcurrency members are taking advantage of trading signals I’m focused on this week, but in addition to current trading opportunities, I want you to understand what a Bitcoin halving process is, and then be prepared for the next event.
Here are three hot-off-the-press Microcurrencies on my radar this week:
Despite Bitcoin’s recent sideways movement, the three coins mentioned here are nearing levels of entry, and I’ll be talking about them in today’s discussion.
Join the Money Morning Live Show at 12:00 ET today for an update on these coins.
Outside of the opportunities knocking on my door right now, I want to help you understand what a “Halving” process is for Bitcoin, and how it can benefit us as traders.
Understanding Bitcoin’s Halving Process
I’m sure you’ve heard of a stock split wherein the shareholder has 100 shares of a company stock worth $20/share, and after the stock splits, the investor holds 200 shares of the stock now worth $10/share. When this happens there is no market value change. The investor’s investment was worth $2,000 before the split, and it’s still worth $2,000 after the split.
I mentioned the stock split example only because I know that confusion exists between stock splits and Bitcoin’s halving process. In the cryptocurrency space, we don’t see splits like stocks, but instead we have “Halving” events.
While a stock split doesn’t change the market value of the investment, the halving process can be very influential to cryptocurrencies.
Instead of involving shares of stock, Bitcoin’s Halving process is related to the number of coins a crypto miner is awarded for “solving a puzzle.”
Let me explain a little further.
The History of Bitcoins
When Bitcoin first launched in 2009 there was a cap put on the number of “outstanding” coins that would be made available – the cap is 21 million coins allowed to be mined.
A crypto miner is someone who uses super-charged computers to “mine” for coins – meaning the computer must solve a very complex equation. It’s like solving a huge, complex puzzle.
There are Bitcoin miners across the world – all in competition with each other to solve the puzzle and receive the reward of valuable Bitcoins.
To date, approximately 18.5 million coins have been mined, which leaves 2.5 million more to be discovered.
It is expected that the remaining coins will be mined by the year 2140. So, why did it only take 13 years to mine the first 88 percent of available coins, and it is expected to take another 118 years to mine the remaining 12 percent?
The answer is the Halving process.
How the Halving Process works
Each puzzle that is solved creates a block that is added to another block, creating a blockchain.
The genesis of the blockchain was block number zero back in 2009, and the reward for miners who solved the complex puzzle at that time was 50 Bitcoins per block.
Now, Halving events are programmed to occur every 210,000 blocks and takes roughly four years. Mining and halving are expected to continue until the last of the 21 million coins are mined.
After the initial block began in 2009 there have been three halving events. The first halving event occurred nearly four years later, on November 28, 2012. It was block 210,000, and the new reward for mining became 25 new Bitcoins per puzzle solved – essentially the reward was cut in half, thus the “Halving Event” was formed.
A second halving event occurred on July 9, 2016 at block 420,000, and at this point the mining reward was cut in half again to 12.5 Bitcoins per puzzle solved.
Finally, the last halving event occurred at block 630,000 and the reward was cut in half again to 6.25 coins per puzzle solved – which is today’s current mining reward.
The next halving is expected to occur in the spring of 2024, and the reward will be reduced to 3.125 coins per block.
What does this mean to traders like us?
If you remember back in your Econ 101 course, lower supply and steady demand leads to higher prices, and this applies to Bitcoin as well.
So, as the supply shrinks for Bitcoin and the demand steadies or rises, we can look at it like a rising tide, impacting all the boats – from major to minor coins.
Halving events are worth understanding and recognizing because they’ve typically preceded bullish runs in the cryptocurrency arena.
The pattern of halving may only come around periodically, but as with all the patterns I follow, they each have value.
I’ll be mentioning the halving process again, but I want you to prepare yourselves now. I’m not waiting around for the next halving process to occur in order to trade microcurrencies.
In fact, my Dark Net software program is sending plenty of trading opportunities my way, and I’ll be introducing these opportunities. Please join me in the discussions
Join by clicking right here. The session starts at 12:00 p.m. ET Today.
Until next time!
Tom Gentile
America’s #1 Pattern Trader
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