On May 11, 2020 the reward for miners who add transactions to the Bitcoin blockchain and help secure the network decreased from 12.5 to 6.25 Bitcoins.
Some view the reduction in the number of new Bitcoins minted roughly every 10 minutes as a way to strengthen the biggest cryptocurrency’s long-term prospects.
They claim that as a result of the supply squeeze, and assuming demand holds steady (or better yet, grows), the price of Bitcoin should go higher. Plain economics 101, demand/supply rules.
Yet, there’s one major flaw with this theory.
You see, the reduction in daily newly minted Bitcoins from about 1,800 to 900 post-halving is negligible. …
It was supposed to be the biggest Bitcoin event of the year.
Bakkt was touted by its creators as a game-changer for the crypto industry. Its much-hyped, eagerly anticipated launch of physically-settled Bitcoin futures contracts was described as a revolutionary product offering.
Advocates believed Bakkt would help unlock massive new demand for Bitcoin. They argued that major institutional investors, who were previously sitting on the sidelines, would enter the market and confidently trade Bitcoin.
After almost a year of delays, on September 23 the wait ended. Bakkt finally went live.
And then, welp, reality sank in.
Measly 105 futures contracts settled on Bakkt’s first day of operation, with only 72 Bitcoins trading hands. This resulted in about $710K in overall volume. By the end of the first week, Bakkt’s BTC futures volume remained remarkably low, hitting less than $6 million during that period. …
In considering Bitcoin’s progress, often people attach great importance to recent price movements. However, this is fundamentally wrong.
You see, price isn’t an indicator of network development or future growth prospects.
To fully appreciate where we are on the adoption curve and what’s next, it’s better to assess the overall health of Bitcoin’s blockchain and the progress being made in the context of the protocol’s overarching goal.
Bitcoin is a decentralized payment network and new kind of money. …