• When Bitcoin was operational in 2009, the initial block reward was set at 50 BTC per block of transactions — roughly every 10 minutes. On May 11 2020, the 3rd halving occurred, reducing the block reward from 12.5 BTC to 6.25 BTC. Our estimation for the fourth halving, based on the 90-Day moving average block time or settlement time, gives a forecasted date of Apr. 20 2024 for when the Bitcoin protocol will cut rewards from 6.25 BTC to 3.125.

• Despite the block reward’s decrease by half, miners' revenue can be compensated by BTC’s increase in price. It is also important to note however, that miners' profitability is also determined by electricity, equipment cost etc.

• The US government sent the remaining 30.17k $BTC ($2.01B) originating from the March 2022 James Zhong Seizure (51,326 BTC) to an apparent Coinbase address on Apr. 2 2024. Previous selling activity includes a sale of ~9.9k BTC in March 2023 and one of 9.8k BTC in June 2023.

• Bitcoin’s proof-of-work consensus is inherently energy-intensive, requiring continuous expenditure on power & compute to ensure transaction validators maintain “skin in the game.” Heading into the Halving, miners continue to ramp up operations. In March, the network’s estimated power draw shot above 20.6 GW, up 66% year-over-year. Assuming power usage remains stable, this equates to 180.5 TWh in annualized electricity consumption— around 4% of the amount generated in the U.S. in 2023.

• Energy estimates are enabled by “nonce analysis,” a method for fingerprinting ASICs. At the moment, Antminer S19s & S19j Pros make up nearly half of the Bitcoin hashrate, contributing 24.1% and 25.7% respectively. Post-Halving, these rigs will break even at power costs around $0.06 - $0.07/kWh.

• ASIC fingerprinting also allows us to estimate hardware efficiency in Joules per Terahash, with the average rig consuming 31 J/TH— slightly more efficient than the Antminer S19. In comparison, Marathon (MARA) quotes fleet efficiency at 24.5 J/TH, with CleanSpark (CLSK) close behind at 24.6 J/TH.

• 💦🔬 Tx-Level Alpha: Over the past year CleanSpark (CLSK) increased their hardware fleet efficiency faster than any major competitor, consuming 16% less energy for every hash produced— and these operational improvements are clearly visible on-chain. Address 3KmN receives mining pool payouts matching CleanSpark’s monthly production updates, and has already received 392 BTC in the first 2 weeks of April, providing an early look at revenues flowing to the 2nd-largest miner by market capitalization.

• Bitcoin has never in its lifetime history crossed a halving at its all time high price. This time it's different. Or is it? That's the most dangerous phrase in investing. Let's see if it is merely unrealistic optimism. From the 1st to 2nd halving, November 2012 to July 2016, BTC price increased 9,204% from $12, to peak at $1,135. Like all cycles, it then went down. After bottoming out at $198 (still significantly higher than at the start), BTC then went up again to $652 at the 2nd halving.

• Between the 2nd and 3rd Bitcoin halvings, July 2016 to 11 May 2020, the top hit 2,888% growth from the 2nd halving date, at $19,496. Again, the BTC price plunged down more than 80% (and again was still higher than the start of the cycle), but recovered to $8,720, approximately half of the top.

• Whereas previously the BTC price traded in a boring sideways movement after all-time highs for around 1 to 1.5 years after the cycles started, as we approach the 4th Bitcoin halving, we have seen 3 major highs, each one higher than the last. The latest was only last month on Mar. 14 2024. Bullish?

• 💦🔬 Tx-Level Alpha: It's really more than hopium. The Bitcoin price increase comes from a couple of significant recent developments. With the approval of Bitcoin ETFs in the US, institutional money from large asset managers like Blackrock has entered as a new and considerable demand source. Asia has now also opened to Bitcoin — Hong Kong just approved its first Bitcoin ETF, with more coming up. If this new Bitcoin halving cycle plays out like previous ones, a 100% price increase to 6 digits is actually conservative.

• Previous Bitcoin halvings have coincided with significant macroeconomic events, propelling prices upwards. The approval of Bitcoin ETFs earlier this year, coupled with unprecedented demand, has led ETF issuers to accumulate over $55B (4.2% of circulating supply) in just 3 months, driving BTC prices to new all-time highs. ETF accumulation and post-halving selling pressure by miners will act as counter-balancing forces, influencing prices in the coming months.

• While ETF issuers such as BlackRock and Fidelity have been purchasing BTC, Grayscale was the only issuer that has been selling some portion of its holdings since the approval. Grayscale remains the largest BTC holder — together with BlackRock, they hold two-thirds of the total BTC holdings among ETF issuers.

• The changes in the percentage share of circulating supply held by ETF issuers over time demonstrate that since the approval, there has been significant demand from these issuers. As their percentage share increases, the price of BTC also increases, even hitting a new all-time high.

• 💦🔬 Tx-Level Alpha: This transaction indicates the transfer of 800 BTC from multiple addresses to an address attributed to Fidelity Investment.

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