It's the meme that dreams are made on Every four years the Bitcoin Haring Rolls around are squeezing the supply of Fresh BTC and firing up the rocket ship A few months later and we're all off to The Moon sounds too good to be true Sounds too good to be true but it works Every time or does it according to a red Hot take from one crypto VC the 4-year Bitcoin cycle is not only cancelled this Year but it's been dead for almost a Decade okay we'll take the bait strap in And let's find out if there's anything To This the VC behind this claim is the London-based outlier Ventures the Company describes itself as the world's Leading web 3 accelerator and most Active web3 investor by volume of Investments outlier portfolio includes The likes of Brave a fetch Ai and ocean Protocol and its business partners Include Aptos filecoin hyera Nia padot Polygon and wormhole outlier was founded In 2014 so the name carries that pre Ethereum OG pedigree they probably Didn't last this long by making Frivolous claims so let's see what they Have to say about the Bitcoin cycle in Early September outlier posted an Article to its website entitled Bitcoin Harving the four-year cycle is dead and It was penned by their research lead Jasper deir in it he makes the case the
Bitcoin Haring no longer has a Fundamental impact on the price of BC And this has been the case since 2016 now between the spot Bitcoin ETF Launches in the US and the preh Haring All-time high this year we have heard Some grumbling about how this time is Different but to say that this time has Been different every time since 2016 we Have to admit uh that's a new one so uh Hats off to jper for the fresh angle Here so the article begins with a few Observations about the price of Bitcoin For example that BTC leads and the rest Of the crypto Market follows and this is One of the most basic principles in Crypto unless you try your luck with Micro cap cryptos which play in A League Of Their Own the fate of your investment Depends on what Bitcoin is doing Bitcoin's price action has tended to Follow four-year cycles of expansion and Contraction and Orthodoxy tells us that These Cycles are shaped by the Bitcoin Harving Jasper explains the two main Reasons behind this thinking the the First is a matter of supply side Fundamentals the Haring reduces the Amount of new BTC entering circulation And this leads to relative scarcity and Price appreciation as demand outpaces Availability the second is psychological You see the mere perception of a Scarcity reinforces expectations that
Bitcoin's price will increase this has Been the case previously and it has Turned the Bitcoin Harin into a news Story media attention magnifies the Bullish Haring narrative and demand Tends to increase according to the Article the fundamental driver behind BTC price action has been Irrelevant for The past two cycles the notion of the Four-year Market cycle based on the Bitcoin harving is basically hot air at This point Jasper says however he does Emphasize that this doesn't make outlier Ventures bearish on crypto the article Begins making its case against the Cycle Theory by pointing out bitcoin's Unusually weak PR price performance Since this year's Haring at the 125 days Post Haring Mark a BTC was up by a Median of about 22% in Prior Cycles or Epoch as they are called here but this Time around Bitcoin is actually down by 8% for reference we are currently in the Fifth Epoch meaning the 4-year period in Between each Haring and the fifth Epoch Has proven to be the worst for BTC price Performance in history never before in Bitcoin coin's history has BTC been down 125 days post harving mark versus its Price on harving day and this doesn't Sound too good but it's worth taking a Closer look at the data behind this Claim Jasper uses the 125 days after Haring Mark as a point of reference but
Also shares a chart showing other points In the second to fifth epochs the fifth Epoch is underwhelming so far but you Could say the same for the third Epoch It spent most of the first 100 100 days Underwater also if we look at the change In price from day 100 to day 125 the fourth and fifth Epoch saw Similar price movements BTC dumped by 15% both times overall this table shows Us quite a lot of volatility and only Four Epoch so there's arguably not Enough here to base any conclusions on However Jasper has uh many more charts Up his sleeves so let's move on Bro crypto Podcast okay welcome to the Bro crypto Podcast I'm chadus Maximus go by Mex Chad 100 on Twitter and I am Giga dick The dude with the biggest p&l in all of Crypto bro bro say what my p&l is 100% Bigger than yours bro please I was Longing Doge and drinking neat badier While you were still spot buying BTC on Mount gox bro bro you're still driving a 2020 Aventador where's your Bugatti at Bro bro when Bon hits a dollar I'm going To be rocking a super yacht while you're Still stuck in traffic bro the Bro Crypto podcast is sponsored by the coin Bureau deals page if you're looking for Trading fee discounts of up to 70% and Sign up bonuses of up to $100,000 and amazing discounts on
Hardware wallets then don't be a bro be In the no and check out the link in the Description below And now back to the show BR Crypto bro bro bro bro Bro bro the article then discusses the Daily Bitcoin block rewards and these Are of course what gets hared in the Haring so they deserve closer attention By reducing the block reward for miners By half the network reduces the rate at Which new BTC is created this reduces The new Supply entering the market Thereby slowing the journey towards the Max supply of 21 million BTC and as you Can see from this chart the rate of BTC Issuance has flattened drastically since Earlier epochs aside from reducing Inflation the main argument for the Haring's market impact is its effect on The minor economy after the Haring Miners have to adapt to a lower margin Environment they may no longer be able To afford to invest in the latest Hardware making their operations less Efficient than competitors and reducing Profitability miners who find themselves Underwater will often sell reserves in Order to keep taking along until mining Becomes profitable again depending on The health of these reserves some miners May eventually shut down and their Operators may go bankrupt this reduces The Network's hash rate and Mining
Difficulty making mining more profitable For those miners who do remain all of This is extremely significant for miners But what does it mean for the price of BTC the article imagines an extreme Scenario where after the Haring miners Immediately sell all of their new loock Rewards this allows us to isolate the New supply of BTC as a variable and Determine its Market impact remember It's the reduction in this new Supply Coming from the miners that is supposed To create scarcity and drive prices up But when you look at the potential Market impact of all miners selling Their daily BTC block rewards it appears To be negligible this is Illustrated on A chart showing the total daily block Reward in USD obtained by all miners Divided by the total volume traded in The market in USD until mid 2017 miners Daily block rewards amounted to more Than 1% of the total volume of BTC being Traded as the market has grown and Haring have continued this has decreased Dramatically today the combined sell Pressure from all miners sell in all Their daily block rewards immediately Would account for just 0.17% of the total Market volume the Article acknowledges that this doesn't Account for miners block reward reserves Which may be potentially sold after the Haring however it does show that the
Notion of a supply shock created by the Haring is unrealistic or rather it's a Shock felt only by the miners themselves And this is because the daily block Rewards both before and after the Haring Are a minuscule proportion of the volume Of BTC traded every day by the way if You enjoying this video go ahead and Har The like button for us a good karate Chop will do and make sure you Subscribed and have your bell Notifications on too so you'll never Miss another upload next the article Turns to the preh Haring runup this Period relates to the psychological Impact of the Haring because an Approaching Haring is perceived as a Bullish Catalyst as such optimism and Demand for BTC may increase prior to the Day of harving on the face of it this Certainly appears to have been the case Earlier this year in the 200 days before The 2024 Haring BTC ripped by almost 2.5 Times and this was a preh Haring tear Not seen since the second Epoch when Bitcoin dominance was 99% compare that to the 200 days before The 2020 Haring when BT it barely moved But let's be honest the Harin wasn't the Only big story in crypto this year and We have to of course consider the ETF Factor the launch of the US spot Bitcoin ETFs in January created enormous buy Pressure around
915,000 BTC so far and most of this Buying took place in q1 driving up Prices so quickly that it arguably Warped the current cycle Harin included This article posits an argument that the ETFs merely pulled forward the demand And price action usually seen with the Harvey Jasper dismisses this argument on The basis that the ETFs and Haring are Independent catalysts whose impact Should be evaluated separately quote They aren't mutually exclusive and if The harving still mattered we should Have seen significant price action on The back of this double Catalyst he then Shares an interesting chart showing Btc's price action in the 200 day runup Before the Haring plotted against Google Search volumes for Bitcoin Haring and Bitcoin ETF the chart shows that btc's Runup this year was significantly more Bullish than the average from EPO 2 3 And 4 moreover you can see that total Google searches for Bitcoin Haring did Not start to explode until well after BTC had peaked in March and this Suggests that the hype around the Haring Was not the driver behind B BC's massive Rally in q1 next the article plots btc's Price performance for the 100 days after Each catalyst so 100 days post ETF Launch and 100 days post the harving in The post ETF period BTC returned a 36% Gain after 100 days but in the post
Haring period BTC was up by just 7% After 100 days as such it seems clear That the ETF launch was a more Meaningful Catalyst for the price action Than the Haring okay so the ETFs were a Big deal for Price action this year and The Haring wasn't so much that seems to Check out but then the article makes a More eyebrow raising contention namely That the Harin hasn't had a meaningful Impact on the crypto Market since 2016 say what well if we return to the Chart showing the market impact of all Miners immediately selling their BTC Block rewards we can see what Jasper is Getting at here once again the chart Shows the total daily block reward in USD obtained by all miners divided by The total volume traded in the market in USD to assess the potential Market Impact if all new block rewards were to Be sold immediately this appears to have Peaked around 5% in mid 2015 and Declined sharply for the rest of the 2010s by the 2016 Haring it was around 1% % by 2019 the chart had completely Flatlined and it has oscillated in a Range between 0 and 0.2% ever since if the daily BTC block Reward decreases every Epoch and daily Traded volume of BTC increases as the Market matures the market impact of Miners selling new block rewards will Inevitably Trend towards zero when you
Plot these data on a chart and compare You can see a sharp inverse correlation Between decreasing block rewards and Increasing trading volume this was most Pronounced in the third Epoch from 2016 To 2020 over that period volume Rose From under $1 billion to over $40 Billion at the same time block rewards Decreased from around 1% of daily traded Volume to somewhere below 0.1% based on this data Jasper does have A point trading volume has increased so Dramatically that daily block rewards Look irrelevant by comparison in this Sense mid 2017 looks like the last time Block rewards were not a negligible Proportion of volume however it's Important to consider what caused the Increase in trading volume over time Proponents of the Haring driven 4-year Cycle Theory might argue that the Harving whether by squeezing BTC Supply Or through sheer narrative power is Responsible for the increase in trading Volume from this point of view trading Volume increased as block rewards Decrease is evidence of the Harvin's Market impact that's literally the whole Point a less fresh Supply more hype and New demand prices go up and voila the Harving effect the article seeks to Debunk this idea and as such Jasper Provides an alternative account of what Drove the increase in btc's trading
Volume in the third Epoch and I'll give You a clue it starts with an e If you said EOS you can see yourself out Of course I'm talking about ethereum in 2015 just before the third Epoch Ethereum launched a bringing smart Contracts to crypto for the first time And this paved the way for the Ico craze Which brought an explosion of new crypto Tokens to the market for the first time As the article puts it ethereum and the Ico craze quote drove trading volume to All pockets of the digital asset Market Including BTC and incentivized the Exchanges to to mature more quickly Allowing them to onboard users more Easily and process larger trading Volumes and this seems to us a more Persuasive Catalyst than the Bitcoin Haring but this begs a question what About 2020 BTC ripped 6.6 times in the First year after the 2020 harving Coincidence well Jasper has another Alternative explanation for the Explosion in trading volume that we saw In 2020 to 2021 he says the real reason For the rally was the expansion of the US money supply preceding the May 2020 Haring on the eve of the Bitcoin Harvin In 2020 the US money supply was up Almost 25% year onye as a result of the Government's pandemic response policies As the article puts it quote the US
Money supply surged at an unprecedented Rate in modern West history fueling Speculation and inflation across various Asset classes including property Equities private equity and digital Assets this too is plotted on a chart Which clearly shows how bitcoin's Monster rally closely followed the Expansion of the new money supply during The pandemic so while 2020 was indeed a Haring year there was a much bigger Macro Catalyst that makes the Haring Look a little less important here the Article then turns to the question of Minor Supply ratio for reference this is The total BTC held by miners divided by The total BTC Supply or in other words How much of the supply is held by the Miners the graph shared here shows a Very clear downtrend beginning in Q2 2022 when the minor Supply ratio was Around 99.75% it's now around 99.2% and this is No surprise because miners have to sell At some point and they will be able to Mine less new BTC as the Haring schedule Progresses it's hard to see this Downtrend reversing unless miners Actually start buying massive amounts of BTC interestingly though this was the Case for at least one minor this year in July Marathon digital bought $100 Million worth of BTC and said it plans To buy more and this is the exact
Opposite of a minor being squeezed by The harving and capitulating out of its Reserves to keep the lights on it's Remarkable almost as if they saw the Haring coming and prepared for it by the Way if you're wondering why on Earth a Miner would want to buy Bitcoin you may Be interested to learn that the price of Mining one BTC this year has Consistently been above the market price Of Bitcoin ever since the Harin in May The cost of mining one Bitcoin broke Above $94,000 anyway in order for the Haring To have a real effect on the price of Bitcoin separate from its mematic power The amount of BTC being traded GL Globally would have to fall through the Floor and we can imagine for example 10 Years from now a lot more BTC will have Been lost and perhaps some government Will be Diamond handing a significant Portion of the supply in such a scenario Miners selling of new block rewards and Older reserves could make up a slightly Larg proportion of the overall BTC Traded than they do today however 10 Years from now is also two Haring away So to be honest we don't expect miners To be moving the market in a big way Unless they are going out of business And liquidating their entire reserves Overall it's a compelling case that we Have here uh the Haring is a
Attractively simple Catalyst in Bitcoin's Short History it has lined up With other major bullish catalysts Allowing for some debate over how Impactful the Haring is but when you Look at the quantity of BTC being mined And sold by miners compared to the the Size of the overall Market the answer Becomes clear it's just too small a Proportion to be a major fundamental Catalyst where it does have power it Seems to be sheer narrative power in Some then it would be wise to focus on The macroeconomic forces instead of Relying on the 4-year Cycle Theory Bitcoin is just too big to operate on Its own schedule now and for those of us Outside the mining industry the Harin is Starting to look more and more like a Meme previous Haring have coincided with Seismic changes from the dawn of Ethereum and massive money printing but There's no guarantee that we will Continue to see bullish macro events Every 4 years just look at 2024 now sure We had the ETFs but they've been pretty Quiet lately who knows uh Epoch 5 might Just be the uh nail in the coffin of the Four-year Cycle Theory this is not a be Post I'm just Saying okay that's all for today folks Uh let us know in the comments what you Think about this Haring driven 4year
Cycle is it in the room with us right Now drop a like if you're still waiting For that bullish macro Catalyst and Don't forget to subscribe and turn your Bell notifications on so you'll never Miss another upload as always thank you Very much for watching and I'll see you Next time this is Nick signing off
