The "Last Halving"
Frustrated by the Bitcoin and Crypto market action lately? I know I am. If you are, I encourage you to do the same as I have done, and look beyond recent market action and contemplate a deep dive analysis of the overarching supply/demand equation surrounding Bitcoin, and therefore by association, all Cryptocurrencies. Let's do that by taking a walk through a relatively recent time in history.
You may not remember this time in recent history as vividly as you can recall 9-11, but try to remember October 1973 (personally I was a young adult Jr. in high school), so I remember it well. That was the year started in January by Richard Nixon beginning his occupation of the White House for a 2nd term and ending in December by Gerald Ford becoming the 40th U.S. Vice President after the resignation of Spiro Agnew in October. Gerald Ford then went on to become the 38th President of the U.S. when Nixon resigned in disgrace due to Watergate.
But October also goes down as the month when the Arab member states of the Organization of Petroleum Exporting Countries (commonly referred to as OPEC) declared an oil embargo against the United States.
To protest U.S. support for Israel during the Yom Kippur War, OPEC cut oil production by 9 million barrels per day; a staggering 30% supply decrease – the biggest oil production cut in history.
The embargo raised the market price of oil as supplies diminished… and led to global oil shortages. Eventually, the price of oil quadrupled, causing a major energy crisis in the U.S. and Europe, which resulted in price gouging, gas shortages, rationing and long lines at the pumps; multiple blocks-long lines.
The supply shock sent the U.S. economy into a tailspin and directly led to a decade of “stagflation”, the term coined by Paul Samuelson, the first American to win the Nobel Prize in economics, for explaining the simultaneous and concomitant rise of inflation and unemployment rates in the US during the 1970s and 80s. Gross domestic product (or GDP) fell 0.7% in the 1970s while unemployment shot up 169%.
In hindsight, the OPEC oil embargo is likely the most significant and impactful supply shock in modern history. Just a 30% decrease of an important asset sent the world into a frenzy. But I believe we’re about to see something even bigger. I’m talking about a 100% supply shock… and it’s expected to happen this year. We will have never seen anything like this and it’s creating a limited opportunity for those who have the prescient foresight to connect the dots and set themselves up early.
The computer chip shortage we’re seeing right now… The 2011 rare earths crisis… The 1979 gold panic… The 1973 oil embargo I highlighted previously… None of these saw their supply cut by more than 50%.
We are set to witness something much bigger in the crypto market. Unlike the current supply-chain crisis we’re in today, the mainstream press is completely missing this anticipated supply shock coming to bitcoin.
While we can never know the exact amount of gold and oil there is in the ground, we do know the exact number of bitcoin that will ever exist. There can never be more than 21 million bitcoin in existence. That issuance is strictly regulated by computer code.
The Federal Reserve can print as many U.S. dollars as it likes, and mining and fracking can produce more gold and oil… but the number of bitcoin will never exceed 21 million.
This pre-programmed rarity is precisely why bitcoin has wildly outpaced other investments over the past decade. Smart people realize it’s one of the best ways to protect – and actually increase – their purchasing power in the face of unrestrained money-printing lately and rising inflation.
But bitcoin’s code contains another feature that isn’t only anti-inflationary – it's also deflationary. Over time, fewer and fewer newly mined bitcoin are pre-programmed to come to market. This deflationary feature in bitcoin’s code is called a “halving.” A bitcoin halving is when the supply of newly mined bitcoin is cut in half every four years.
The first bitcoin halving in 2012 reduced the amount of bitcoin produced every day from 7,200 to 3,600. The second halving in 2016 dropped it from 3,600 to 1,800. And the most recent halving in 2020 cut it from 1,800 down to 900.
There are still 29 more halvings left before new bitcoin will cease being produced. The next one in 2024 will reduce the new supply of incoming bitcoin from 900 per day to 450. Then, bitcoin will halve again in 2028 – and so on – until the last halving scheduled in 2140.
That’s the story everyone’s been told. But I’m telling you today that all those halvings are irrelevant. They no longer matter.
The real “Last Halving” is coming in 2022. And it’s going to make all the previously scheduled halvings obsolete. Now, the Last Halving isn’t one of bitcoin’s pre-programmed halvings. It wasn’t coded by bitcoin’s pseudonymous creator, Satoshi Nakamoto. It’s much bigger than that.
You see, a group of bitcoin “insiders” have done something that was supposed to be impossible. They’ve discovered a “backdoor” way to reduce the amount of new bitcoin coming to market all the way down to zero… but instead of waiting until 2140, recent research says it will happen next year, in 2022.
This event will “pull forward” 118 years’ worth of halving gains in just one year. It’s like the 1970s Oil Shock on steroids… And nobody’s talking about it!
Consider the potential here. Each and every time bitcoin has halved, it’s triggered a massive bull run. The 2020 halving set off a 10x gain. The 2016 halving triggered a 50x gain… And the 2012 halving delivered a 100x gain, from then to today’s prices.
And some of the small coins attached to bitcoin have soared 100x, 200x, and even 500x higher in the months following a bitcoin halving.
Now, imagine what could happen – from not one halving – but from the equivalent of 29 halvings all at once. I’m talking about a potential 100% supply shock in one of the most valuable asset classes in the world next year. We’ve never seen anything like this.
I, and others who are considered experts in Bitcoin, predict bitcoin will reach $500,000 within the next five years. That’s a nearly 755% gain from today’s prices. And when it does, I believe it’ll be traced back to this Last Halving.
Now you may be wondering, “Why don’t I just buy bitcoin?” You should absolutely buy bitcoin. But if that’s all you buy, I contend you’re potentially leaving millions of dollars on the table. And the reason is simple…Whenever there’s a supply crunch, it sends large assets (like bitcoin) surging… But it sends the smaller assets attached to the major asset even higher.
I’ll use the chip market as an example. It’s at the epicenter of the current supply chain crisis and is currently experiencing a supply shock as high as 33%. As a result, established chipmakers like Intel and AMD have gone up as much as 240%. But smaller plays connected to these bigger names have skyrocketed as high as 14,000%. That’s more than 58 times higher.
And that’s a halving in a nutshell. It reduces the amount of supply, causing prices to go up. And it can make an asset like crypto soar to unimaginable heights. So while bitcoin could 10x from here, I’ve found other plays that could soar an order of magnitude higher. It’s almost like having massive leverage without the risk of using borrowed money. So what, more specifically, will cause this?
First “Last Halving” Catalyst - Drastic Supply Cuts
So as you can see, halvings are important events with the potential to change your financial life. But not every halving is known. There are what I call “secret halvings". If you watch the news, you haven’t heard a word about them. It appears the mainstream financial media doesn’t know about them.
Yet what they’re missing is this: The biggest “halving” of all is about to happen. And it all has to do with some surprising recent evidence. You see, historically, bitcoin miners haven’t been able to hold all the bitcoin they mine. They’ve had to sell much of it to fund their operations.
Since bitcoin’s inception, it’s been plagued with negative connotations to the drug market, gun running, and money laundering. That made it taboo for the gatekeepers of traditional finance to touch it. So bitcoin miners haven’t had access to traditional sources of capital.
Think about it. For years, the mainstream hated bitcoin. They labeled it a scam. The last thing a big, respectable bank wanted to do was loan money to bitcoin miners. So if you were a bitcoin miner, and you didn’t have access to traditional sources of capital, you were forced to sell a large portion of your bitcoin to fund operations.
But now, that’s all changing. Over the past few years, we’ve seen major adoption in the crypto market. Today, just about every big bank is getting into crypto. In fact, last July 2020, the OCC sent a letter that I copied into one of my recent blogs evidencing that they have given U.S. banks their blessing to begin to custody Bitcoin for their customers.
It’s in the news. US Bank, Bank of America, Morgan Stanley, Goldman Sachs, JPMorgan… you name it. That means the miners can raise all the money they need through the capital markets (equity or debt).
Take Cipher Mining, for example. It’s been mining bitcoin for years but had to sell much of its production because no major financial institutions would fund it. But now, Fidelity and Morgan Stanley recently invested $425 million into this project. Now that Cipher is sitting on $425 million in cash, do you think it’ll ever have to sell its bitcoin again? The answer is clearly “no.”
Another bitcoin miner, Marathon Digital, recently received a $100 million line of credit from a Wall Street-backed bank – with bitcoin as collateral. It can purchase all the new mining equipment it needs without touching its bitcoin stockpile. Three years ago, Marathon couldn’t get $1 million – let alone $100 million – in funding from a bank.
We’ve now entered a new phase in this market. Miners will start tapping the public markets for capital. And they’ll never have to sell bitcoin again. In fact, evidence shows that over the past six months, miners have reduced the number of mined bitcoin sent to exchanges by 60% or more.
Over the second half of the year, miners have rapidly reduced the number of mined bitcoins they’re transferring to exchanges. Previously, mining companies would make these transfers to sell mined bitcoin.
Clearly, they’re not making these moves at the same levels anymore. That figure has gone down by 60% since the start of this year. Miners are currently transferring around 134 bitcoins per day, meaning the average miner is selling only about 15% of its daily bitcoin production. In other words, 85% of the bitcoin that miners earn every day is being kept off exchanges and unavailable for anyone – investors, institutions, or funds – to purchase.
Soon, there will be no more new bitcoin available to the public. This is why I call these “secret” halvings. Nobody’s factored bitcoin hoarding into their pricing models.
So, going back to the 900 bitcoins that are unlocked per day… How many of those will the miners – the gatekeepers of new bitcoins – eventually allow to enter the market?
And based on the latest hoarding data, it’s forecasted that the miners alone will cause a 98% drop in new bitcoins hitting the market per day by next year. That brings the newly mined, available bitcoin from 900 each day all the way down to 16. But to be a true Last Halving, we need to see a 100% drop. What about the remaining 16? That brings me to the second part of this explosive setup…
Second “Last Halving” Catalyst - Demand Shock
Remember, halvings have two sides – a supply side, and a demand side. So far, I’ve only covered the supply side. And while the supply is drying up… the demand is soaring.
According to a November 2020 report by Pantera Capital, popular payment platforms Square and PayPal alone are buying up 100% of all newly created bitcoin.
Multiple bitcoin exchange-traded funds (ETFs) have launched in Canada this year. And federal regulators are reviewing at least nine proposed ETFs awaiting potential approval.
But we’re also about to see an unprecedented demand shock from another area no one is talking about: credit cards. Many credit cards have started offering bitcoin rewards. With Visa, you can get up to 2% back in bitcoin. And with Mastercard, you can now get up to 3% back.
This will be a huge ongoing source of demand for which no one is accounting. It bears repeating: No one has accounted for this demand in their bitcoin pricing models. And this brand-new type of demand will eat up what remains of the bitcoin supply like nothing else ever has.
Think of it this way…If you could get paid in an asset that’s averaged 230% annual returns for the last decade – as bitcoin has – would you take anything else? Would you take dollars over bitcoin rewards? What about Diners Club points or airline miles?
The average person earns $548 a year from typical credit card rewards. If a bitcoin rewards credit card had been around 10 years ago, the average credit card user would be sitting on an $11 million fortune of bitcoin rewards today.
Michael Saylor, the CEO of MicroStrategy, thinks bitcoin could 100x in price in the coming years. If that happened, people switching their rewards from dollars to bitcoin today could end up with as much as $584,000 in bitcoin – in as little as 8 years. That’s $584,000 in free money just based on their credit card spending. Let me ask you again: Would you ever want to have a credit card that didn’t pay you in bitcoin?
People are already going crazy for bitcoin rewards. The average credit card is used for around $5,000 of spending per year. But bitcoin rewards cards are averaging $30,000 per year in spending. People are using these cards six times more than traditional credit cards because they’re eager to reap the benefits in bitcoin. This explains why Mastercard is now launching a crypto-backed card in Asia.
Again, this is a new type of demand that nobody has modeled. We’ve never seen this level of transactional demand for bitcoin before. Annually, credit cards process $35 trillion in transactions globally. That’s a massive amount of money – and an important amount of it is headed directly for bitcoin.
So, how many bitcoins per day is this going to take away? Let’s be ultra-conservative and say just 1% of credit card transactions involve a 2% bitcoin reward. Based on these estimates, you’re looking at up to 276 bitcoin in new demand per day by next year. There is nowhere near enough bitcoin to go around. Now can you see why all future halvings are obsolete?
If the credit cards keep up their rapid adoption, recent research numbers show they could eat up the remaining supply in as little as two months. So two months from now, we could wake up and all the new bitcoin will be accounted for.
This is why I call this anomaly the “Last Halving”, because we’re talking about an unprecedented surge in demand and a drastic supply shock coming together to deliver more than a century’s worth of halvings at once.
So please, don’t wait. You need to get ahead of this “Last Halving” before it unfolds.
Forget computer chips. Forget soaring housing costs. Forget everything you think you know about a supply chain shock… This will be unlike anything you or I have ever seen before. We’re talking about more than a century’s worth of halvings in less than one year.
Digital Asset Advisors sponsors a subscription based service that provides a recommendation of a cryptocurrency coin that I believe will be dramatically more impacted by this event in terms of its price than will bitcoin. And by subscribing to our service you can receive a new recommendation of one of these coins every month over the next year. This will enable you to begin to build your portfolio like I have over the past 4 years, to reach a level today of over 70 different cryptocurrencies in my own portfolio, all while avoiding the mistakes I made.
Now some of you may be thinking, like others with whom we’ve discussed this opportunity: “I’m too old to put money into such a risky scheme”, or, “I’m retired and I don’t need to risk anything to make more”. Well, if that describes your situation, that’s great; but what about your children or grandchildren?
One of the nice features of a portfolio of cryptocurrencies is that you can pass them on to future generations by just providing the information to gain access to your private wallets where they’re stored. Or better yet, you can purchase a subscription to our newsletter and let them begin to build their own portfolio themselves.
Because you see, over the next months, we’re going to provide to our subscribers each month a research recommendation of what coin to buy that month that I believe will benefit dramatically from the “Last Halving” event.
Last Halving Coin No. 1:
The first coin in our Last Halving selection is tied directly to the demand growth for crypto rewards cards. Its original goal when it launched in 2016 was to develop a crypto debit card, making it easy to spend crypto anywhere in the world. Since then, it has expanded its mission to essentially be a full-fledged crypto banking app.
Today, it has a full suite of products, including:
an electronic, cryptography protected Wallet;
an assortment of Visa-approved prepaid cards with a range of benefits;
automated trading strategies that make investing in cryptocurrencies easy;
the ability to obtain a loan backed by your crypto holdings (currently you can get up to 50% of your collateral);
the ability to earn up to 14% interest on select crypto deposits; and,
a next-gen blockchain with low transaction costs designed for payments, DeFi (Decentralized Finance), and NFTs. Their ecosystem is powered by their utility token and they continue to add uses for their token.
Today, the lines between traditional banking and cryptocurrency banking are quickly fading. It’s only a matter of time before they’re one and the same. And it is big business, as the global banking industry is valued at about $7.5 trillion.
I have a research report that is available to subscribers through my website that outlines this coin as one that will benefit directly by the bitcoin supply/demand phenomenon that we outlined earlier.
For solid reasons outlined in that report, I believe this coin could reach price levels of $15/coin. That’s an over roughly 2,000% gain from today’s prices. Enough to turn a $500 purchase amount into over $12,000 and every $1,000 purchase into about $25,000. Easily enough to overcome the annual subscription price of $400.
Now as you would expect, I don’t guarantee, nor can I guarantee, these results. Any activity you may conduct based upon this information is at your own risk, and there is risk involved. So as I always say, don’t commit any more than you can afford to or are comfortable in potentially losing. I’m not providing investment recommendations here, and if you’re not financially astute, you may wish to consult a Financial Advisor regarding this information.
That said, the time to get in is now, before this coin or any subsequent recommendations see a huge influx of new users and its utility token price increases dramatically.