Bitcoin Halving draws near while US National debt hits $1 trillion in interest while a no landing often leads to a hard landing


In roughly 26 hrs time, the Bitcoin halving event is scheduled. This event will reduce the block subsidy for Bitcoin miners from 6.25 BTC to 3.125 BTC, thereby halving the reward that miners receive for their efforts.

At the time of writing this email, Bitcoin was priced at USD$63,503 or AUD$98,883

After the halving, the immediate impact is a considerable decrease in miner revenue due to the reduced block subsidy. This could lead to a decline in the hashrate as less efficient miners may turn unprofitable and exit the network.

The 2024 Bitcoin Halving is set to reshape the mining landscape significantly, just as previous halvings have. While the exact outcomes are uncertain, the event will undoubtedly present both challenges and opportunities. Miners who plan strategically, taking into account both economic forecasts and operational efficiencies, will be better positioned to navigate the post-halving environment.

For those in the Bitcoin mining industry, being adaptable will be key to leveraging the halving event as an opportunity rather than a setback. With the right preparations, particularly in ASIC management and firmware optimisation, miners can continue to thrive even under tightened economic conditions.

To other news.

It seems the "no landing" narrative is winning...

Source: Bloomberg

After there’s been a lot of talk about a so-called soft landing, i.e. successfully bringing down inflation towards its target without plunging the US economy into recession, the US economy’s continued strength along with some hotter-than-expected inflation readings has given rise to a new buzzword, the “no landing” scenario.

As opposed to a soft landing explained above and a hard landing, which describes bringing down inflation at the cost of a sharp drop-off in economic activity and a significant rise of unemployment, a “no landing” scenario describes an outcome where robust economic growth coincides with a failure to bring down inflation despite the Fed’s or any other central bank’s efforts to cool it.

The thing people need to realise is a no landing often leads to hard landing and I don't think enough mkt participants are considering this outcome.

Source: Statista

And the real issue no one wants to talk about - America's national debt now costs $1 trillion dollars in interest per year. For some perspective, Australia's annual GDP in 2022 was USD$1.693 trillion.

This unsustainable interest bill is driven by high interest rates and a record $34 trillion mountain of debt.

Source: Visual Capitalist

So on that sober note!

Happy Friday and have a good weekend!

This information contains unsolicited general information only, without regard to any individual’s investment objectives, financial situation or needs. It is not specific advice for any particular investor or trader. Investment in the stock market involves risk.

This information may not take into account your investment objectives or financial situation, and you should obtain advice based on your own individual circumstances before making an investment decision.

This information is made available to you by ANDIKA Pty Ltd ABN 41 117 403 326, a licensed securities and derivatives dealer (AFSL # 297069).

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