Prepare for the Bitcoin Halving

Welcome to the first edition of the SPI-Club Crypto Currency Newsletter!

In this issue, we’re diving deep into the world of cryptocurrency and exploring the fascinating concept of the Bitcoin Halving. Whether you’re a seasoned crypto investor, or thinking of dipping your toes into the world of digital currencies, this personalized newsletter aims to provide valuable insights into what drives Bitcoin’s price appreciation, and how to navigate the market cycles with greater confidence.

Understanding the Crypto Market Cycles

You’ve likely heard of the “parabolic” market cycles in cryptocurrency, where prices seem to skyrocket, and the crypto world takes centre stage in mainstream headlines. During these periods, portfolios often feel invincible, and everyone becomes a crypto expert.

However, let’s take a step back and examine the broader picture to determine if these cycles are merely coincidental. If we closely analyse the historical performance of the crypto market, a pattern emerges.

It typically displays three years of positive price growth followed by a year of downturn. This pattern has remained consistent since the inception of Bitcoin. With the upcoming Bitcoin Halving in April 2024, history suggests that 2024 and 2025 could be positive years, potentially followed by a correction in 2026.

The Bitcoin Halving and Its Impact

I previously discussed the Bitcoin Halving in 2023 and why it has such a dramatic impact on Bitcoin’s price. At its core, it revolves around the fundamental economic principle of supply and demand. The Bitcoin Halving is crucial in understanding Bitcoin’s value proposition as a store of value, setting it apart from inflationary fiat currencies.

Inflation erodes the purchasing power of traditional currencies over time, often leading to financial hardship and instability in many nations. Bitcoin, on the other hand, has a mechanism to keep inflation in check — the Halving. This event, occurring roughly every four years, reduces the rate at which new Bitcoins are created, making Bitcoin scarcer and potentially more valuable in the long run.

The Hidden Costs of Inflation

Inflation has been likened to a crime against humanity, as history has shown us. From Germany in the 1920s to Zimbabwe in the late 2000s, runaway inflation has wreaked havoc on economies, leading to the loss of savings value, government defaults, and even the overthrow of corrupt regimes.

This hidden tax on citizens underscores the importance of a technology like Bitcoin, which allows people worldwide to opt out of their national currencies and into a global currency resistant to hyperinflation.

Bitcoin’s Role in Combating Inflation

Bitcoin’s unique feature of a fixed supply of 21 million coins and a predictable inflation schedule through the Halving helps maintain its value. This predictability sets it apart from traditional currencies, which are printed endlessly by governments.

As Bitcoin’s supply becomes scarcer, its price tends to rise, making it an attractive option for those seeking to protect their wealth from the erosive effects of inflation.

Demand and Growth for Bitcoin and Crypto

Demand for Bitcoin and cryptocurrencies is on the rise. Major financial institutions, including BlackRock, WisdomTree, Invesco, and Fidelity, have recently received approval from the US Securities Exchange Commission (SEC) for Bitcoin ETFs, attracting billions of dollars into the crypto markets and overtaking Silver ETF’s as the second highest “Store of Value” to Gold.

Furthermore, the adoption of tokenization of real-world assets is gaining momentum, promising liquidity in previously illiquid markets and simplifying asset ownership and trading.

Trading the Bitcoin Halving Cycle

As the Bitcoin Halving approaches, prices are likely to rise. To capitalize on this, it’s crucial to prepare your portfolio in advance. Here’s a proposed checklist to ensure you’re in the best position possible before the Halving in April 2024:

1. Start with Bitcoin: Bitcoin’s dominance tends to rise initially in a market cycle, so it’s a wise starting point.
2. Take Profits into Altcoins: As Bitcoin leads the way, consider diversifying into altcoins.
3. Enjoy the Run: Relish the bull run but avoid getting greedy. Follow the smart money by monitoring the Market Cap Adoption reported in column H of the SPI-Club Cryptocurrency Model Portfolio.
4. Don’t Get Overleveraged: Be cautious with leverage; avoid adding it after the altcoin season.
5. Look for Warning Signs: Keep an eye out for signals that the bull market may be coming to an end.(Copy 3 above)
6. Capital Preservation: Shift into large-cap coins or stablecoins as the market slows down.
7. Rinse and Repeat: After the bull market, accumulate cryptocurrency for the long term and explore new technologies.

SPI-Club’s Approach to Crypto

At SPI-Club, we’re committed to providing valuable insights and guidance without offering specific investment advice. We understand that the world of cryptocurrencies, digital assets, and blockchain technology can be overwhelming. With over 9,000 cryptocurrencies reported in 2023, it’s clear that the landscape is vast and evolving.

The top 20 cryptocurrencies make up nearly 90% of the total market, and our SPI-Club Model Portfolio tracks 18 cryptocurrencies with a combined market capital exposure currently of $1.3 trillion. This is just the beginning, with only 4.5% worldwide adoption reported.

Stay Informed with SPI-Club

As you embark on your journey into the world of digital assets, remember that nobody can predict the market’s every move. However, with insights and by studying the detailed SPI-Club Model Portfolio analytics, you can navigate the disruptive and innovative world of cryptocurrencies and equities with more confidence.

If you wish to learn more about the burgeoning Digital Assets sector, we have an excellent publication provided by Bitstamp that we can send to you upon request.

Until next time, happy investing!

Warmest regards

Stuart Langan

SPI-Club Founder

Our  “DIY”, “Done for YOU”, or “Done with YOU services”

Disclaimer: SPI-Club provides information and guidance but does not offer investment advice. Please conduct your research and consult with financial professionals before making any investment decisions.