Will the mining of 21 million BTC force Satoshi Nakamoto to show up and trigger a new round of "money printing"?

2024 is destined to be an extraordinary year for Bitcoin and the broader cryptocurrency industry.

On January 6, a mysterious address starting with "bc1q9z" sent 26.91 BTC to an address marked as Satoshi Nakamoto. Coinbase director Conor said on the social platform that either Satoshi Nakamoto woke up, bought 27 bitcoins from Binance and deposited them into his wallet, or someone just destroyed $1 million worth of bitcoins.

On January 11, the U.S. Securities and Exchange Commission announced the results of its vote on the approval of the application for the listing of a Bitcoin spot ETF. The vote was passed 3 to 2. Chairman Gary Gensler, Commissioner Hester Pierce and Commissioner Mark Uyeda voted in favor, formally approving the listing of the spot Bitcoin ETF.

On January 13, Gary Gensler rarely mentioned "Satoshi Nakamoto" in an interview with CNBC, saying that there are innovations in the field of blockchain ledger systems, but the launch of the spot Bitcoin ETF is somewhat ironic because it goes against Satoshi Nakamoto's mission of decentralization. He explained: "There is no doubt that there are innovations in this field, and these innovations that I taught at MIT around ledger systems are just accounting systems called blockchain technology. There is an irony in this. Satoshi Nakamoto said this would be a decentralized system and finance, and this (ETF) led to centralization."

This series of operations, coupled with the upcoming Bitcoin block reward halving, has made the crypto community question whether the mining of 21 million BTC will really "force" Satoshi Nakamoto to show up. Koala Finance will make an in-depth analysis in this article.

Will the mining of 21 million BTC force Satoshi Nakamoto to show up and trigger a new round of "money printing"?

Satoshi Nakamoto, known as the "Father of Bitcoin", released the "Bitcoin White Paper" in 2008, which stipulated that the total number of Bitcoins would only be 21 million. Bitcoin came into the world in 2009, but since then, Satoshi Nakamoto's whereabouts have become a mystery of the century, and no one today can accurately prove who Satoshi Nakamoto is.

In fact, the first person to propose that Satoshi Nakamoto will appear after 21 million bitcoins hit the maximum supply is also very well-known, that is, Jamie Dimon, CEO of JPMorgan Chase. He believes that once the maximum supply is issued, Bitcoin may be eliminated and pointed out: "I think it is very likely that when we reach 21 million bitcoins, Satoshi Nakamoto will appear, laugh hysterically, and then quiet down, and then all bitcoins will be deleted."

On the other hand, due to the increasing difficulty of mining, the last Bitcoin will not be fully mined until around 2140, which means that even if "Satoshi Nakamoto" is alive, it will be difficult to prove his existence by 2140, after all, no one can live to be over 130 years old. According to BTC.com data, the difficulty of Bitcoin mining has ushered in the latest mining difficulty adjustment at block height 824,544. The current mining difficulty has been raised to 73.2 T, an increase of about 1.65%, setting a new record high. Indicators such as the difficulty curve and difficulty logarithm have also been rising, which means that the last Bitcoin will be mined even after 2140, or even later.

Another question is, if there is no guarantee that once the circulating supply reaches 21 million bitcoins, will the issuance of bitcoins end? No one knows whether bitcoin will stop at 21 million, and Jamie Dimon also admitted that "I have never met a person who told me that they know the truth", so he proposed this unique theory, that is, once bitcoin reaches the maximum supply (that is, 23 million), it will continue to issue more, just like the US dollar "printing tide".

Of course, the market also has other perspectives on Bitcoin, and believes that 2024 will be the most critical year for Bitcoin. Let us continue to analyze——

Will 2024 be the “Year of Bitcoin”?

With the U.S. Securities and Exchange Commission approving a spot Bitcoin ETF and Bitcoin’s next halving event scheduled for April this year, 2024 is already shaping up to be a transformative year for digital assets, especially Bitcoin.

Historically, the halving has led to a significant increase in the price of Bitcoin in the months and years that follow (as shown in the chart below). While the actual timing of this event is predictable, it takes time for the market to find a new price equilibrium.

Moreover, at this stage, the Bitcoin RSI is below 50, the MACD is below its signal line and is negative, and the current price is below the 20- and 50-period moving averages, which are $42,701 and $42,932 respectively. Analysts believe that if Bitcoin breaks through the $43,100 "pivot point", there will be a large amount of room for flexibility.

The last Bitcoin halving occurred on May 11, 2020, when the block reward dropped from 12.5 BTC to 6.25 BTC. Since the event, Bitcoin has grown at a compound annual growth rate of 52%, with the fastest growth occurring in the first 9-12 months after the event. The combination of these factors provides a compelling investment case for Bitcoin and a potential entry point. Using the stock-to-flow model, it can be found that the implied value of each Bitcoin in April 2024 is approximately $62,000, which is approximately 34% higher than the current price. (Note from Koala Finance: The stock-to-flow model can quantify the value of assets with limited supply).

In any case, this year is worth paying attention to for Bitcoin and the entire cryptocurrency market, so let's wait and see.