The flatbread spot ETF has been approved. Next, it is time for the market to bet on the halving event that began around April this year.
Once the halving begins, the rewards miners get for each block they mine are cut in half, and those uneconomical mining machines and mines will shut down. Take the Ant Miner S19 as an example. Currently, the shutdown currency price is around 21,191 US dollars. After halving, the price of flatbread will need to stay above 42,380 US dollars before miners lose money.
After the shutdown of these mining machines, the computing power of the entire network will inevitably decline, and JP Morgan predicts that it will be reduced by 20%. Mining is becoming more and more difficult, and there are fewer and fewer that can be mined, which will exacerbate the scarcity of the cryptocurrency market. From a supply perspective, flatbread will have the most investment value at this time.
Referring to the rule of halving the previous three times, the bullish market for flatbread breaking through the previous high may occur at the end of the year or the second year of the “halving year.”
Looking further at long-term trends, flatbread and even mainstream cryptocurrencies may become a type of asset allocation for the public like gold. Because after the launch of spot ETFs, flatbread has gradually been properly named in the traditional mainstream market and is becoming standardized, and more and more people are able to seize their investment value. Currently, institutions are still buying when prices are falling. Last Thursday and Friday alone, all ETF providers, including BlackRock, bought a total of 23,000 coins.
Currently, the total market value of flatbread is about US$839.35 billion, and the total market value of gold is US$13.779 trillion. The former accounts for just over 6% of the latter. If the ratio is conservatively estimated to reach 10%, the total market value of flatbread can already exceed trillion US dollars.
With its scarcity of metals and such a huge market capitalization, gold has become a globally recognized symbol of wealth in the process of development. In the future, in the digital age, it seems that gold may no longer be sufficient to fully represent the wealth of human beings. Flatbread and even mainstream cryptocurrencies as a major asset allocation in the global capital market are expected to become another viable path.
Although we currently have no advantages in the layout of mining companies or exchange operations in the industrial chain, the upstream leaders in the industrial chain, that is, the Chinese manufacturers that have a say in the global market, are still Chinese manufacturers, which actually have the “pricing power” for future cryptocurrency assets.
You need to know that under the POW mechanism, the pricing power of cryptocurrencies is inseparable from the two factors of computing power+energy cost. These two factors can be said to influence the profitability of downstream miners.
Computing power comes from mining machine performance and mining machine ASIC chips. Behind it is the semiconductor industry. China has already stepped out of manufacturers such as Bitmain, Bitmicro, and Smart Chain Group (ICG).
Bitmain Ant Miner and BitWeishenma Miner currently dominate the market, and their share in 2019 reached 80%.
ICG's main market share is 60% +, targeting a large number of non-mainstream cryptocurrencies, and has the ability to provide mining machine ASIC chip solutions with high computing power and low energy consumption in the upstream user market. In an environment where computing power increases more slowly and costs continue to rise, ICG can meet customer needs very well. In other words, ICG can gain more pricing power advantages as a result.
Behind the energy cost is the new energy industry, renewable energy such as wind energy and photovoltaics. In the future, it will greatly reduce global renewable energy utilization costs. Needless to say, this part of the advantage is still in China.
Therefore, whether it is a mainstream cryptocurrency or a non-mainstream cryptocurrency, it is still under development, and the situation is uncertain. But at least upstream, Chinese mining machines and chip makers are currently leading global leaders.
This will not change in the future, and we will always have enough say in the ever-evolving cryptocurrency sector. As each time it is halved and the difficulty of “mining” increases, cryptocurrency mining machine manufacturers will also break out and continue the slow bull market. At the same time, Chinese manufacturers such as Bitmicro and ICG will also break out of their own bull market.