Kyle Samani

1/ All of the discussion around EMH is mostly academic nonsense What matters is whether the price will go up or down. Or in other words, are there more dollars crossing the spread to sell or to buy

2/ After the halvening, we have very good reason to believe there will be fewer dollars cross the spread to sell Therefore, for every dollar of marginal demand post-halvening, that dollar pushes the price up further than pre-halvening, because there is less selling pressure

3/ The only way for my logic to be incorrect is if, post-halvening, the net new dollars for BTC falls by > 50%

4/ The EMH says the market knows this, but the fact that everyone knows this doesn't matter The EMH says the price of BTC would be bid up in advance of this such that the amount of net new capital falls ~50% We have no reason to believe this

5/ Why? Because we know that there are structural limitations on the inflow of capital into BTC (ETF, custody, fund structures, branding, access, etc) As those restrictions continue to get lifted, *more* new capital flows in, not less

6/ Those buyers are not valuation sensitive They will not care what the price of BTC is when they finally buy

7/ Why? Because that is not in their mandate Their mandate is to be long some asset class. eg 60% equities, 40% bonds Note that a mandate like this holds true irrespective of the current price. That is *the point* of the mandate

8/ These institutions operate on decade+ time scales. They maintain mandates like the one above because they realize they *cannot* time the market cycles. They don't even try This is also why the S&P was up 30% in 2019... after a 10 year bull run.

9/ So, what we know definitively is a) issuance cut in half b) getting easier for *big* capital to enter c) big capital will not care about the price at the time they enter The halvening is *objectively* bullish.

10/ Now, what about price action +/- 60 days around the halvening? I honestly have no idea The only thing I feel pretty strongly about is that it will be volatile. However, buying vol in crypto is expensive, so that doesn't mean that this is necessarily a good a trade.

11/ The halvening is *the ultimate* schelling point for market participants to put on longs/shorts And so they will. Hence the vol

12/ You can argue that there's no steam left and we bleed going into the halvening That miners are already over leveraged and will capitulate. And that the lack of a pre-halvening pump will cause this all to become reflexisvely worse That's one possibility

13/ You can also argue that ASIC manufacturers will use balance sheet capital + leverage (not available in prior halvenings) to pump the market, coinciding with rainy season in China. Miners, and everyone, sees the pre-halvening pump, and everyone takes more leverage to go long

14/ In this case, the miners are taking leverage in the form of mining machines (not a perfectly accurate description of the financial contract, but close enough for our purposes). If ASIC manufacturers induce the right level of euphoria, miners buy over priced ASICs

15/ And then after the halvening, in this scenario, the market dumps

16/ There are lots of other opinions on how the halvening will play out. I have no particularly conviction in any one theory. The hardest part about theories like this is validating which theory is playing out in real time, given the noise in the data