Half full or half empty?
Bitcoin (BTC-USD) is a little ways away from undergoing a once-every-four-years software update in the blockchain that has historically been hyped as a positive catalyst for the highest-profile cryptocurrency. The quadrennial halving event, due as soon as today, occurs when bitcoin miners’ reward for validating transactions is slashed in half, essentially reducing the rate at which new tokens are created by 50%.
No airdrop: As such, the technical event reduces the supply of new bitcoins entering the market, a move that could drive up the coin’s price should demand remain constant or rise. Given the fixed supply of bitcoin, the halving event also reinforces scarcity by reducing the rate at which new BTCs are introduced into circulation. Bitcoin had already reached a record high of $73.8K in mid-March, as the green light for spot bitcoin ETFs spurred strong and persistent demand for the token. Now, volatility has spiraled amid the countdown to the halving (as well as jitters about higher-for-longer interest rates), with bitcoin dropping some 17% since hitting its record. Overnight, the crypto was trading up 5% to around $65K.
Note that miners’ profitability generally suffers after a halving as their rewards get cut in half. This fourth halving will lower the reward to 3.125 BTC from the current 6.25. The overall halving process is expected to end in 2140, when the number of bitcoins in circulation is expected to reach its programmed cap of 21M (there are currently about 19.7M BTC in circulation).
Half full or half empty? “I view Bitcoin as better than 50/50 to top $100K this year,” notes Logan Kane, adding that bullish analyst calls have mounted despite bears drawing comparisons to past speculative bubbles. Since there have only been three halvings so far, and many of the all-time gains were reached in mid-March, it could also not be a given that bitcoin (BTC-USD) tends to rise closer to the event. SA analyst Florian Grummes warns that BTC typically weakens for about 15 to 45 days immediately before and after the halving.
Risk premiums
Mini drones? Missiles? From Israel? Elsewhere? The reports are still murky surrounding the explosions heard across the cities of Isfahan and Tabriz in Iran, but state media have played down the damage from the suspected attacks, while Tehran has lifted flight restrictions. Whether the tensions will subside is anyone’s guess, but it appears that stocks and crude oil have gotten over any initial shock. Just hours before the suspected retaliatory strike, S&P Global cut Israel’s rating by one notch, joining Moody’s Investors Service in lowering the nation’s sovereign credit score. (90 comments)
See what’s next
Netflix (NFLX) initially rose, but then pulled back 4.8% AH on Thursday, following strong Q1 results and subscriber growth that once again surpassed expectations. The streamer saw double-digit gains amid a password crackdown, but attention settled on the fact that Netflix will stop reporting subscriber numbers entirely, starting in Q1 2025. The company also issued soft Q2 guidance, given last year’s growth re-acceleration. Despite having different takes on the results, Investing Group Leaders Long Player and Michael Wiggins De Oliveira both believe Netflix is no longer a growth stock. (11 comments)
National security
As the U.S. considers banning Chinese-owned TikTok, Beijing has ordered Apple (AAPL) to remove Meta’s (META) social media apps WhatsApp and Threads from its app store in the country. Messaging apps Telegram and Signal were also removed, citing national security concerns, though some others were still available for download. “We are obligated to follow the laws in the countries where we operate, even when we disagree,” Apple said in a statement. Beijing’s order is likely part of a 2023 rule that required all apps available in China to register with the government by the end of March this year or cease operating. (7 comments)
