From: allin
Bitcoin Halving and Historical Performance
The way Bitcoins are created is by solving complex mathematical algorithms that take time, energy, and money, with a reward given for solving them [00:53:35]. Roughly every four years, this reward gets cut in half, an event known as a “having” [00:53:47].
After past Bitcoin halvings, there have been significant price appreciation cycles:
- 18 months after the first having: Bitcoin price returned 45x [00:55:52].
- After the second having: It returned almost 28x [00:55:59].
- After the third having: It returned almost an 8x [00:56:04].
Initially, in the first one to three months after a halving, there’s a period of reassessment as people try to figure out what’s happening [00:55:25]. However, within 6 to 18 months, significant price appreciation tends to occur [00:55:38].
Disclaimer
These historical averages are not predictions and should not be considered financial advice [00:56:47].
Bitcoin Commercialization and Future Outlook
The commercialization of Bitcoin through ETFs (Exchange-Traded Funds) is considered a “Central Key moment” for Bitcoin to “cross the chasm” [00:56:31]. Applying the average performance of the second and third halving cycles suggests meaningful appreciation [00:57:13].
Some expect Bitcoin to completely replace gold and become a transactional utility for hard assets [01:00:52]. This is combined with concerns about dollar debasement [01:00:09].
Chamath Palihapitiya believes that many countries will become “dual currency,” recognizing their local currency for daily transactions and Bitcoin for permanent assets with residual value [00:57:28].
Regulatory Landscape and Political Influence
The crypto community has become a significant lobby, advocating for its interests [00:58:40]. This political awakening comes after years of efforts by figures like Elizabeth Warren and Gary Gensler to make crypto illegal or drive it offshore [00:58:51].
Donald Trump has recently become “incredibly Pro crypto” [01:12:14]. The question of whether a pro-crypto environment is important, especially given concerns about dollar debasement, is a key policy point [01:12:23].
There are approximately 50 million Americans who own crypto [01:00:53]. Chamath suggests that if 40 million of these individuals show up to vote because their wealth creation is threatened, it could significantly impact elections [01:01:04]. David Sacks estimates being a pro-crypto candidate could be worth 500 basis points (5 points) in an election if young people, who are attracted to crypto because it lacks government control, show up to vote [01:00:46].
A proposed simple framework for crypto regulation involves a “sophisticated investor test,” similar to a driver’s license [01:02:05]. This would allow individuals to buy crypto if they pass the test, ensuring they are informed buyers and can risk their net worth [01:02:10].
Other Cryptocurrency Mentions
- FTX (Sam Bankman-Fried): Mentioned in passing as someone who “dropped money on everybody” and had “delusions of grandeur” [00:59:16]. He was rumored to attempt to influence the election with a billion dollars [00:59:31].
- NFTs (Ape): An inquiry about when “my Ape” (referring to Bored Ape Yacht Club NFTs) will be worth money again received the answer “never” [01:02:29].
- Sax Coin / J Coin: These appear to be meme coins or hypothetical personal coins, with “Sax coin” being down to $8 [01:02:41].
- Doge: While Doge was at break-even for one individual, the possibility of it becoming a “thing again” was raised [01:04:09].