I Think, 2029 Will Be The Last Bitcoin Mega Bubble

Bitcoin had Mega-Bubbles in 2013 and 2017

At this time of the year, BTC increased x10-x20 for less than 12 months, followed by a brutal year-round bear market. We are currently assuming that this will happen again in 2021.

The obvious logic for these mega bubbles is clear: it happens because Bitcoin halves the block reward every 4 years (210,000 blocks), effectively halving total inflation, thus causing a supply shock in the markets for 12-18 months. Then.

In 2012, the block reward was reduced by half from 50 BTC to 25. We've seen Bitcoin's price jump from $ 100 to over $ 1000 in 2013. In 2016, the block reward was reduced by half from 25 to 12.5. We have seen the bitcoin price rise from $ 1000 to $ 20000. In 2020, the block reward has been halved to 6.25 BTC. So far we've seen the price drop from $ 20,000 to $ 60,000 and the market is still tremendously bullish. We haven't seen where to peak this time, but logic says we'll graze at least $ 200k and, based on those models, we'll probably go up to $ 400k.

Stability is better than mega bubbles

Of course, mega-bubbles are a swing-trader's best friend. We have the opportunity to sell at the top and even shorten the market as it goes down to make enormous profits before buying again. However, this is a zero-sum game tactic and an awakening for every very rich person is left behind where dozens of novices are ruined. This is bad for holding and bad for Bitcoin's reputation in general. It would be much better if Bitcoin could make consistent gains every year without too much risk. This automatically puts mainstream adoption in order and turns off dissent very quickly.

Is it possible?

I think it's not only possible, it's guaranteed to happen in as little as eight or nine years. I started noticing this the other day while randomly reviewing a Bitcoin block explorer.

What i noticed

One thing I didn't consider before: it won't be long before mining fees exceed the block reward. Recently, while browsing a few blocks, I saw something that shocked me:

Mind-blowing

Bitcoin miners only exceed a full Bitcoin for transaction fees on some of the newer blocks. This is legendary. Let's compare this with other blocks.

Even in February we see the fees to be equally high, but in September Bitcoin was still doubling, while it was about 6 times lower in BTC (not USD) terms. Bear market wages in 2018 and 2019 were very cheap and even 5 times lower than in September.

However, the most interesting block block height is 500,000. This was in the middle of the last mega-bubble on December 18, 2017. The BTC.com mining pool received a massive 3.4 BTC from fees alone: ​​this is madness.

Corporate adoption

Institutions are going into Bitcoin, and it's safe to assume they don't care much about fees. They use Coinbase to buy BTC, so they don't even have to pay on-chain fees, and when they pay on-chain fees, they transfer so much BTC at a time that the fee is completely pointless.

Due to all these variables, it is quite clear that miner wage rewards will increase more than in 2017. I predict that some blocks will only go up to 5-10 BTC from transaction fees. This is ALREADY higher than the current block reward, which is 6.25.

So what will happen in 2024?

Block reward will be reduced to 3.125. Later, in 2028, the block reward will be reduced to 1.5625. Later, in 2032, the block reward will be reduced to 0.78125.

Looking at these timelines, it becomes quite clear that cutting the block reward will not make some difference in as little as 8 years. Who cares that the block reward is 1.5625 when the fees increase by 5 BTC + per block? At some point in the relatively "near" future, the halving event will not matter at all.

And I think it's a wonderful and amazing thing. Bitcoin inflation will effectively be close to zero in less than a decade. Everyone talks about how low inflation will be in 50 years, but we certainly don't have to wait that long.

All of these work perfectly as intended. The network is vulnerable when young and should greatly promote security. As the network ages, it can defend itself and pay miners only transaction fees. It's a really cool system. Although BTC will pay miners close to zero inflation, it will remain the highest safety net in the world.

Welcome stability

I believe this dynamic will greatly increase stability and eliminate those pesky mega bubbles altogether. Instead of bitcoin raising x10-x15 above the curve, the biggest bubbles we should get are around x3-x4, just like normal. This will make it much easier to predict the markets and know when to support the network as the market is overheating, and when it will support the network, and to predict in trades. Buy low sell high. Secure the network and get paid at the same time.

This will be a very valuable event because then we will stop having bear markets throughout the year: Bitcoin will be in a continuous bull market.

Once Bitcoin stabilizes, this stability will flow to all other projects. Crypto is a strip deck. Any advantage that Bitcoin gains seeps into the entire cryptocurrency. Bitcoin is strong.

Result

In less than a decade, for all intents and purposes, Bitcoin will have zero inflation but still be the safest network on the planet. The fees will be huge, but Bitcoin was not designed for high speed: it was designed to create wealth. All we have to do is HODL.

Oddly enough, inflation is a killer dapp and most people just don't get it yet. Bitcoin will not forever be the # 1 coin by market cap, in fact I guess ETH could reverse it at the end of the year for a brief moment. Get ready for the maximalists to cry sweet tears when it happens.

Again, while inflation is actually a gamble (a good gamble), everyone thinks inflation is the devil. Bitcoin eliminates this risk by eliminating inflation, but this opens the door for other networks to exploit inflation in a superior way. We are already seeing how crazy things about yield farming can get these tokens even with absurd inflation (and indeed due to inflation).

Bitcoin will not always be the best cryptocurrency by market cap, but it will be the most secure and stable currency for decades. This is its niche, and there is no competition on this front. Looking at the numbers, I think we can get there in as little as 8 years (maximum 12). I imagine it will be the world reserve currency by then, but somehow it won't even be the highest value project. Crazy thinking. We are entering the Age of Abundance and we are standing on the ground floor.

I advise everyone to take their own guards. It is imperative to take risks to win. If you want to make money, you will take risks.