Based on the halving predictions of BCH and BSV, will BTC enter a downward phase?

Fortunately, BCH and BSV halved first, providing a good reference for BTC's halving. Next month's BTC halving may officially enter a falling phase...

BCH hashrate drops sharply

On the first day after the BCH halving, the total network computing power dropped from 3920.24PH/s to 2597.99PH/s, with nearly 30% of the computing power migrating. As for the attitude of everyone towards BCH after the halving, it is basically bearish. As a lesson from the past, after the Litecoin halving in August last year, the number of newly added coin holding addresses once dropped to the lowest point, reflecting the sharp decline in the market's enthusiasm for LTC after the halving.

Non-small market trend: LTC after the August production cut

Non-small market trend: BCH after the reduction

If the fate of Litecoin is repeated in BCH, then it will now be on the road to the bottom amidst the volatility. In the future, it is very likely that BCH will also fall by half, just like LTC fell from ￥639 on the day of halving to ￥326 ​​now.

Back to the computing power, since there is a time difference of almost one month between the halving of BCH and BSV and the halving of BTC, after the halving, BSV and BCH miners will successively switch to BTC mining due to the halving of their income. If half of the computing power of BCH and BSV is transferred to mining BTC, the overall computing power of BTC will increase by 3%, and the miners who originally mined BTC will be affected. Don’t underestimate this 3%.

After increasing the computing power by 3%, it will reach a historical peak of around 137.8EH

Today, BTC and BCH produced a large number of blocks in a short period of time. The BCH network produced 84 blocks in 3 hours, and BTC also produced two blocks in 3 minutes. Theoretically, the block time should be 10 minutes, but a large number of blocks is normal because some computing power is switching back and forth between BTC and BCH.

Xiaohaojun recorded the computing power and prices of BTC, BCH, and BSV during the halving period:

(Computing power unit conversion: 1000Ph/s=1Eh/s)

From the data in the figure, we can see that after the halving, the computing power of BCH and BSV was quickly withdrawn. BCH lost at least 2430Ph/s of computing power, and BSV lost 247.95Ph/s. Assuming that the computing power of these two parts are migrated to the BTC network, it means that the computing power of the BTC network has increased by 2.68Eh/s. Compared with the computing power we monitored from 107.81 to 111.81, it has increased by about 1.3Eh/s. There are two reasons: 1. The computing power is invisible and intangible. It represents the number of overall hash algorithm operations of the mining machine per second, which is just a reversed number; 2. Due to the increase in the migration computing power, the computing power competition of the original miners has increased, so it is normal for the overall computing power to fluctuate more.

The competition in computing power will cause the mining cost of BTC miners to rise, but it will not cause the price of BTC to rise. Some people will definitely object. Li Xiaolai once said: "In the long run, the cost of miners can be regarded as the fundamentals." In addition, Jiu Shen also pointed out that "for any other commodity, the price determines the cost, but Bitcoin is a little bit of an exception. In addition to the price determining the cost of Bitcoin, the cost in turn also supports the price."

However, the factors that determine the price of BTC are so complex and huge that it is not possible to interpret its value simply by price cost or supply and demand theory. The cost theory is more of an inference from the perspective of the interests of the miners - they will definitely not allow the price of BTC to drop more than their costs.

Currently, only BTC is left among the three halving brothers. Judging from the performance of BCH and BSV after halving, BTC is likely to not escape the fate of entering a period of trough.

After the halving, BSV seems to be about to hit the bottom, even if it has been rising steadily before the halving. BSV reached its peak 2 months before the halving, and BCH also reached a small peak at about the same time. According to this time range, BTC has either reached its peak before the halving on February 12, or will start a new wave two weeks before the halving, and then truly enter the trough period after the halving.

Why does the price of the currency enter a trough period after the halving? The logic behind this is also very simple. The market has over-hyped the expectations for the halving, and has overdrawn in advance. Before the halving, there are a lot of bubbles in the price of the currency. After the halving expectations are fulfilled, the price of the currency will start to fall back and digest the bubbles.

However, it is relatively optimistic that the mining coins are the most promising ones to survive in the cold atmosphere of stock capital game. The upper reaches of the currency market are mining machine manufacturers, miners and exchanges. The mining coins are in the interests of the former, and the currencies that can bring huge traffic to the exchanges are in the interests of the exchanges. These are the "value coins" that everyone wants.

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