Bitcoin Halving

Spot Bitcoin ETF approval to propel BTC to $1M in ‘days to weeks,’ says Samson Mow

Bitcoin is likely to reach $1 million quickly due to a “torrent of money” coming from institutional investors in 2024, according to the Jan3 CEO.

Bitcoin (BTC) will likely reach $1 million in the “days to weeks” following the approval of a spot BTC exchange-traded fund (ETF), according to Jan3 CEO Samson Mow. 

“You’re hitting a very limited supply of Bitcoin on the exchanges and available for purchase with a torrent of money,” Mow said, referring to the inflow of institutional capital that is expected following a potential spot ETF approval. 

“This is why you can go really high all at one time,” he added.

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$100K BTC? Don’t undervalue Bitcoin ETF influence, says Adam Back

Resolving recent systemic failures in the cryptocurrency ecosystem and the prospect of spot Bitcoin ETF approvals could drive Bitcoin to $100,000 in 2024.

The COVID-19 pandemic, rampant inflation and regional conflicts directly influenced Bitcoin’s (BTC) drop in value over the past two years. However, 2024 promises to be a resurgent period, according to Blockstream CEO Adam Back.

The cryptographer, who pioneered the proof-of-work algorithm applied in Bitcoin’s protocol, tells Cointelegraph that the preeminent cryptocurrency is trailing below the historical price trend line of previous mining reward halving events.

Back weighed in on the potential price action of Bitcoin as the next halving approaches, which will see Bitcoin miners’ block reward reduced from 6.25 BTC to 3.125 BTC. Block reward halvings are programmatically hardwired into Bitcoin’s code, taking place after every 210,000 blocks.

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Bitcoin halving, BTC ETF hype driving price up into 2024 — NBX Berlin

Several macro events are contributing to increased interest in Bitcoin, its price and a knock-on effect on the wider markets.

The potential approval of spot Bitcoin exchange-traded funds (ETFs), the looming BTC mining reward halving and major regulatory and enforcement actions have a profound psychological effect on market prices. 

This is a key takeaway from the Next Block Expo conference in Berlin, just as Bitcoin tipped past $42,000 for the first time in over a year.

Animoca Brands CEO Robby Yung, gumi Cryptos Capital managing partner Miko Matsumura, Binance regional manager Jonas Jünger, and Polkastarter business development lead João Leite weighed in on whether the current cryptocurrency bear market was coming to an end in a conversation with Cointelegraph.

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Solo Bitcoin miner defies odds to mine valid BTC block, gets $150K block reward

Mining a valid BTC block solo is so rare that the event has occurred only 270 times out of the 700,000 blocks produced in the last 13 years.

A solo Bitcoin miner has managed to mine the 780,112th block in the Bitcoin blockchain, receiving a 6.25 Bitcoin (BTC) block reward in return. The estimated value of the payout is over $150,000.

The solo miner was also lucky to have produced a valid hash after just two days of mining, as the event itself is rare, and it can take months for a solo miner to produce a valid hash.

The rare event occurred on March 10 and was the 270th solo mined block in Bitcoin’s 13-year-long history. The event is rare because a solo miner of this size usually solves a block, on average, about once every 10 months.

The miner created a solo mining pool using the Solo CK Pool mining service, for which they produced a valid block hash and were rewarded with 6.25 BTC, with a fee reward of roughly 0.63 BTC.

Con Kolivas, the Solo CK mining pool admin, noted that the miner behind the rare event might have temporarily rented hashing power to produce the output hash.

Solo Bitcoin miner’s output hash.  Source: BTC explorer

Bitcoin mining requires miners to input computational power to solve and add the next Bitcoin block to the network. However, with the growing popularity of BTC mining and the constant rise in the network hash rate and powerful mining machines, it’s near impossible for a solo miner to solve the whole block on their own.

Related: How to mine Bitcoin: A beginners guide to mine BTC

Thus, a valid block hash is often produced using the computational power of multiple mining rigs, all trying to mine the next block. The block reward is distributed according to the input hash rate of each miner in the mining pool.

The Solo CK mining pool has been behind several solo-mined Bitcoin blocks in the past as well. Two of these solo-mined blocks came in January 2022, only two weeks apart, with the first occurring on Jan. 11, 2022, at a block height of 718,124, followed by another on Jan. 24, at a block height of 720,175.

How the Ordinals movement will benefit the Bitcoin blockchain

The increasing popularity of Bitcoin NFTs, or Ordinals, will positively impact the Bitcoin network’s security and attract developers to the ecosystem, according to Ordinals proponent Udi Wertheimer.

According to independent developer Udi Wertheimer, Bitcoin (BTC) non fungible tokens (NFTs) will positively impact the ecosystem by improving its security and incentivizing developers to build on the network. 

The number of newly created Ordinals has been spiking in recent weeks, causing a surge in transaction fees and average block size on the Bitcoin blockchain. 

According to Wertheimer, Bitcoin NFTs are going to be beneficial for Bitcoin’s security budget. By driving up transaction fees, the creation of Ordinals will incentivize miners to secure the network while the revenue from mining rewards will decrease with each Bitcoin halving.

“Because the block space is scarce and because there’s demand for stuff like inscriptions, there’s a lot of hope that we will get enough people who want to pay fees in order to keep the Bitcoin network secure,” Wertheimer explained in a recent interview with Cointelegraph.

Also, Wertheimer noted, Ordinals provide a new use case to make building on Bitcoin commercially profitable.

“With all of that interest around Ordinals and inscriptions, I expect that there is going to be a very big ecosystem that is built around that,” he said.

Wertheimer dismisses the notion held by some Bitcoin core developers that creating NFTs is not an appropriate use case for Bitcoin. According to him, in recent years, Bitcoin core developers “have ignored what actual Bitcoin users want.“

To learn more about Ordinals and how they impact the Bitcoin network, watch the full interview on our YouTube channel and don’t forget to subscribe!

What is a coinbase transaction?

A coinbase transaction is the first transaction created in each new block, and it has key features that differentiate it from other transactions.

How coinbase transactions are structured

Coinbase transactions are structured as the first transaction in a block, where the miner includes a newly minted amount of BTC as a reward for their effort in solving a complex mathematical problem to validate transactions and create a new block on the blockchain.

Coinbase transactions have a special format. Compared to a regular transaction input, a coinbase transaction has a different set of values that do not represent unspent transaction output (UTXO). 

As such, in place of a transaction hash, a coinbase transaction will have 32 bytes, all set to zero. The output index is also filled with 4 bytes, all set to 0xFF (255 decimal places).

What is a transaction value and customizable text property in a coinbase transaction

The coinbase transaction’s value is based on factors such as each individual transaction’s value, block height, and halving. Miners can add any customizable text to the blocks they have created.

The value of a coinbase transaction is determined by several factors. These include the value of every transaction validated by the block, the height of the block (number of transactions) and the halving relative to the block. Once the block has reached 100 confirmations, the miner can use the BTC.

When a block is created, it holds approximately 100 bytes of data. There is also an allocation for miners to include any text they prefer. Nakamoto, for instance, wrote the following message when they mined Bitcoin’s genesis block: 

This message is a reference to a headline in the British newspaper The Times from Jan. 3, 2009, and is often seen as a commentary on the state of the global financial system at the time of Bitcoin’s creation. 

Nakamoto chose to embed this message in the genesis block to emphasize the need for a decentralized and trustless system of transactions, free from the influence of central authorities and intermediaries.

Moreover, miners can add any information they choose to personalize the block, sending an unalterable message in perpetuity.

What is fork-prevention in a coinbase transaction

Coinbase transactions help to prevent forks by including special rules for their creation and validation.

Blockchains like Bitcoin are open-source and rely on communities to maintain and develop their code. As such, an event like a fork will cause the chain to split and produce a second blockchain. This blockchain will contain all of its history while heading off in a new direction.

In such a circumstance, a miner can create as much BTC as they want if the new blockchain does not have the rule of maturity in place, thereby working against Bitcoin’s halving algorithm that seeks to preserve the cryptocurrency’s scarcity.

What is a coinbase maturity rule

The coinbase maturity rule governs when the block reward from a coinbase transaction can be spent. 

The BTC involved in the coinbase transaction cannot be spent until the block has received at least 100 block confirmations on the blockchain. Unlike regular Bitcoin transactions that contain data showing the movement of BTC from one wallet to another, coinbase transactions contain data concerning the generation of a new currency that has not yet been spent.

For this reason, the input in these transactions remains blank. Structurally, therefore, coinbase transactions can also be thought of as single blank inputs. The maturity rule was put in place to protect the blockchain from forks, which are events that happen when a community decides to implement changes to the blockchain’s protocol or set of rules.

What are block rewards and Bitcoin halving

Block rewards are the rewards received by miners for mining new blocks and adding them to the blockchain. The Bitcoin halving reduces the block reward by 50% approximately every four years. 

Miners are responsible for creating blocks on proof-of-work (PoW) blockchains like Bitcoin. In return, they are rewarded with BTC after the successful creation of each block. The block reward depends on two things: the number of fees included in the transactions of each block and the number of blocks from the genesis block.

During the early days of Bitcoin, the block reward was 50 BTC per block, and this reward is included in the coinbase transaction. Due to the Bitcoin halving, however, the block reward is reduced by half after every 210,000 blocks mined. Bitcoin’s halving occurs approximately every four years.

The block subsidy that is distributed by the coinbase transaction is 6.25 BTC per block (per the latest halving). And because coinbase transactions create new coins, it is valid without any inputs, as the BTC it contains is newly created and not previously spent.

For example, the Blockstream coinbase transaction in block 650,000 has no inputs, and the single output is the amount of 6.25 BTC in addition to the miner’s 0.244131 BTC of fees collected.

How does a coinbase transaction work

Coinbase transactions have unique features, including maturity, fork prevention and customizable texts. They also have a different structure than other transactions.

On the Bitcoin blockchain, all transactions executed on-chain are combined to form one block. When a block is formed, it will immediately be added to the blockchain. These blocks are immutable and tamper-proof owing to the Bitcoin blockchain’s near-perfect code. Each block should contain one or more transactions, the first of which is always called a coinbase transaction.

Here’s how a coinbase transaction works:

  • Block creation: To earn the block reward after creating a new block, a miner must first create a coinbase transaction.
  • Inputs: A coinbase transaction has no inputs, in contrast to a typical transaction, which makes use of inputs from earlier transactions. A coinbase transaction instead generates brand-new coins out of thin air.
  • Outputs: The coinbase transaction has one or more outputs that list the addresses to which the block reward will be sent. Miners have the option to distribute the block reward to other addresses.
  • Block reward: The block reward is currently BTC, and it is halved approximately every 210,000 blocks. This reward is paid to the miner who verifies and adds the transactions to the blockchain.
  • Mining fee: Miners can also include a mining fee in the coinbase transaction, which is paid by the transaction creators to incentivize miners to include their transactions in the next block.

A miner can include a coinbase transaction, along with other transactions, in the block they have mined and broadcast that block to the network after creating it. The block is then examined by other miners, and if approved, it is uploaded to the blockchain and paid for by the block reward plus any associated mining fees.

Some key features of coinbase transactions are discussed below.

What are coinbase transactions

Not to be confused with the cryptocurrency exchange Coinbase, the term “coinbase transaction” refers to a particular type of transaction that occurs in every new block of a blockchain. 

Coinbase transactions are a key part of the system that blockchains utilize to introduce new currencies that have never been sent into circulation. The first coinbase transaction was generated by Bitcoin’s (BTC) pseudonymous creator, Satoshi Nakamoto, while mining the first genesis block. The coinbase was reportedly paid to the Bitcoin address “1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa” with a value of 50 BTC.

One of the biggest curiosities of the Bitcoin blockchain is that the said block was never confirmed on the blockchain — something that has puzzled many blockchain scientists and developers.

One theory is that this occurred because the first-ever coinbase transaction was encoded in the genesis block’s source code. And because the entire blockchain is built on this genesis block, the concept of confirmation was not applied to it.

Another theory suggests that Nakamoto designed it this way since, if the genesis block were to get unconfirmed for any reason, it would cause a new blockchain to be built, making the original blockchain obsolete.

The coinbase transaction is also used to reward miners for maintaining the blockchain. They are paid a certain amount of coins for each block they mine. This rewards system creates an incentive for miners and helps keep the blockchain secure by deterring malicious behaviors that could destabilize the network.

‘Crypto summer’ likely to start in Q2 2023, Morgan Creek Capital CEO says

Bitcoin’s bull market is likely to start earlier than expected due to anticipation of the BTC halving and favorable macroeconomic conditions, according to Mark Yusko, founder and CEO of Morgan Creek Capital Management.

The next crypto bull market will start sooner than most people think, according to Mark Yusko, founder and CEO of Morgan Creek Capital Management. Yusko thinks the next crypto bull run or, as he calls it, “the crypto summer,” could kick off as soon as the second quarter of this year due to the combination of more dovish central bank policies and the anticipation of the Bitcoin (BTC) halving. 

While the United States Federal Reserve is unlikely to cut interest rates anytime soon, according to Yusko, the markets tend to anticipate the Fed’s decisions. That means even a slowing down or a pause in interest rate hikes would be interpreted as the signal of an imminent pivot. That would spark a positive dynamic among all risk assets, including crypto. 

“What I do think is very likely is the Fed signaling that: ‘Okay, we’re good.’ But that will be interpreted as ‘we’re going to cut’ and then risk assets will explode again,” Yusko pointed out. 

Besides the Fed’s more dovish policies, the anticipation of the Bitcoin halving, which is due to take place in the second quarter of next year, will also drive bullish sentiment in the market.

“The market always anticipates the halving […] Nine months before that is usually when the beginning of summer starts,” Yusko said. 

To learn when to expect the next crypto bull run and how best to prepare for it, watch the full interview on our YouTube channel and don’t forget to subscribe!

Bitcoin and Ethereum gave back their gains, but has anything actually changed?

Bullish crypto momentum fizzled after Fed Chair Powell poured cold water on investors’ hopes that a positive CPI report would trigger a trend change, but higher time frames remain interesting.

Crypto markets threw a nice head fake this week by rallying into resistance on a “positive” Consumer Price Index (CPI) report, before retracing the majority of those gains right after Federal Reserve Chair Jerome Powell took on a surprisingly hawkish tone during his post-rate-hike presser. 

The Fed hiked interest rates by 0.50%, which was well within the expectation of most market participants, but the eyebrow-raiser was the Federal Open Market Committee consensus that rates would need to reach the 5%–5.5%+ range in order to hopefully achieve the Fed’s 2% inflation target.

This basically threw cold water on traders’ lusty dreams of a Fed policy pivot taking place in the first half of 2023, and the damper on sentiment was felt throughout crypto and equities markets.

As the charts below show, Bitcoin (BTC) and Ether (ETH) reversed course right as Powell began his presser on Dec. 14.

BTC/USDT and ETH/USDT, 4-hour chart. Source: TradingView

How do you like them apples?

It’s also not surprising that BTC and ETH price action and market structure on the lower time frames also look identical.

So, yes, markets retraced their recent gains over bad news, but has anything actually “changed?” Bitcoin is still trading with a clear range; Ether is doing the same, and neither asset has made new yearly lows recently.

As the saying goes, when in doubt, zoom out. So, let’s do that briefly and take a better look at the lay of the land.

When in doubt, zoom out!

On the weekly timeframe, Bitcoin is still bouncing around in a falling wedge, a classic technical analysis pattern that tends to lean bullish. The price is doing pretty much what one would expect the price to do within the framework of technical analysis.

There’s expected resistance at the 20-MA, which is lined up with the descending trendline. The volume profile metric shows a bulk of activity in the $18,000–$22,500 range, and the lower arm of the falling wedge has so far functioned as support.

Similar price action was seen in May 2021–July 2021, but of course, the situations were entirely different, so that’s a bit of an apples-to-oranges comparison. There’s a divergence on the MACD and RSI. In short, the price is trending down, and MACD and RSI are trending up on the weekly timeframe, which is possibly something worth keeping an eye on.

BTC/USDT 1-week chart. Source: TradingView

What I like about the weekly timeframe is that candles form slowly, and trends, whether bullish or bearish, are pretty easy to call and confirm. It’s easier to build a solid investment thesis of the weekly time frame than spend endless hours pouring over four-hour, one-hour and daily charts.

Related: Ethereum and Litecoin make a move, while Bitcoin price searches for firmer footing

Anyhow, breakouts from the falling wedge are likely to be capped at the descending trendline, while a breakdown of the pattern or drop below the lower support could see the price fall as low as $11,400. That’s all within the market consensus for most analysts.

As for Ether, like I covered in greater detail in last week’s Substack and newsletter, it’s still doing the bull flag thing: bouncing around between support and resistance and seeing breakouts capped at key moving averages and the descending trendline of its bull flag.

$2,000 remains the eventual target on the radar of most analysts, and downside to the $1,100 is far from shocking.

A dip under $1,000 is likely to raise eyebrows and draw the attention of those looking for more resolute shorts.

ETH/USDT 1-week chart. Source: TradingView

Ether price action is basically doing the same predictable thing as Bitcoin: nothing to see here, stick to the plan (whatever that might be for you). Similar to BTC, there’s also a divergence on Ether’s MACD and RSI — something worth keeping an eye on.

Litecoin update

Last week, I also put eyes on Litecoin (LTC) due to its upcoming network reward halving. While the price has retraced from its local top at $85, the uptrend remains intact, and on the daily timeframe, the GMMA indicator is still bright green.

LTC/USDT 1-week chart. Source. TradingView

The vertical black lines track LTC’s bullish momentum leading into halvings and the corrections that occur right after the halving occurs. For the time being, everything looks to be proceeding according to plan.

Of course, none of this is financial advice. Make sure you do your own research, calculate your risk, think about the worst-case scenarios, weigh your ROIs and take profit, and cut losses zones a few days before actually making a trade. Remember that 1:3 and 1:5 is the optimal risk-to-reward outcome one should be chasing after.

Ignore the short-term FUD and price action. Zoom out and build a strong thesis from that vantage point.

This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter author at Cointelegraph. Each Friday, Big Smokey writes market insights, trending how-tos, analyses and early-bird research on potential emerging trends within the crypto market.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Is Bitcoin the only crypto that will survive FTX? | Interview with Bitcoin maximalist

Bitcoin proponent and author Jeff Booth is convinced that the crypto ecosystem will eventually collapse as a consequence of its centralization — except Bitcoin, that is.

The downfall of FTX and a number of other CeFi platforms in 2022 has reinforced a Bitcoin maximalist narrative, according to which most of the crypto ecosystem will eventually collapse due to its centralization. 

 Jeff Booth, Bitcoin proponent and author of “The Price of Tomorrow”, believes centralized crypto platforms such as FTX and Celsius have ended up replicating the traditional financial system with all its inherent flaws.

“All of crypto is trying to rebuild a financial system that we already have based on manipulation and centralization,” said Booth, in an exclusive interview with Cointelegraph.

Even Defi platforms, which seek to provide a peer-to-peer, trustless alternative to traditional financial services, are bound to fail, according to Booth, since they are being built on protocols that have sacrificed decentralization and security in order to boost scalability.

To Booth, Bitcoin  is the only crypto that remains decentralized and secure enough for being the base layer of the future financial system. 

“The entire crypto ecosystem is going to go to zero besides Bitcoin”, Booth said. 

To find out more about why Bitcoin may outlive the rest of the crypto ecosystem, check out the full interview on our YouTube channel, and don’t forget to subscribe!

Is Bitcoin the only crypto that will survive FTX? Interview with Bitcoin maximalist

Bitcoin proponent and author Jeff Booth is convinced that the crypto ecosystem will eventually collapse as a consequence of its centralization — except Bitcoin, that is.

The downfall of FTX and a number of other centralized finance platforms in 2022 reinforces the narrative that most of the crypto ecosystem will eventually collapse due to its centralization, with the exception of Bitcoin (BTC) — at least according to Jeff Booth, a Bitcoin proponent and the author of The Price of Tomorrow.

Booth believes centralized crypto platforms such as FTX and Celsius have simply replicated the traditional financial system with all its inherent flaws.

“All of crypto is trying to rebuild a financial system that we already have based on manipulation and centralization,” said Booth in an exclusive interview with Cointelegraph.

He argues that even decentralized finance platforms — which seek to provide a peer-to-peer, trustless alternative to traditional financial services — are bound to fail, as they are being built on protocols that have sacrificed decentralization and security in order to boost scalability.

Bitcoin is the only cryptocurrency that remains decentralized and secure enough to be the base layer of the future financial system, says Booth.

“The entire crypto ecosystem is going to go to zero besides Bitcoin,” he said. 

To find out more about why Booth believes Bitcoin may outlive the rest of the crypto ecosystem, check out the full interview on Cointelegraph’s YouTube channel, and don’t forget to subscribe!