On Friday (December 20), Bitcoin plummeted to $96,000 before rebounding, with shorts briefly gaining control. BlackRock, which manages $10 trillion in assets, rarely issued a disclaimer stating that it cannot guarantee Bitcoin's total supply remains at 21 million, sparking controversy in the community. Following the Fed's interest rate cut meeting that released hawkish signals, the former largest cryptocurrency exchange Mt. Gox dumped $102.5 million worth of Bitcoin.
BlackRock: Cannot guarantee that Bitcoin's total supply of 21 million remains unchanged.
CoinTelegraph noted that after BlackRock released a 3-minute video explaining Bitcoin and added a disclaimer stating that it cannot guarantee Bitcoin's supply cap of 21 million will not change, the debate about whether Bitcoin's total supply limit is truly fixed resurfaced.
Bitcoin's fixed supply is one of its strongest claims as a store of value, and removing the supply cap would affect investors' perceptions of cryptocurrencies.
In a video on December 17, BlackRock explained that Bitcoin's fixed supply is 21 million and added that 'hardcoded rules control the supply and purchasing power and help avoid potential abuse of printing more currency.' However, it also added a disclaimer: 'There is no guarantee that Bitcoin's supply cap of 21 million will not change.'
Afterward, Michael Saylor, chairman of the largest public Bitcoin whale MicroStrategy, retweeted the video, leading some critics to argue that Bitcoin is theoretically not scarce.
Joel Valenzuela, marketing and business development director at Dashpay, claimed: 'When the supply cap increases, it will always be part of the plan, and in 2024, people boldly say Bitcoin has not been hijacked.'
Anonymous Ethereum developer Antiprosynthesis added: 'BlackRock understands Bitcoin better than Bitcoin holders.'
Super Testnet, the Bitcoin developers behind BitVM, pointed out that whether Bitcoin's supply cap can be changed depends on how people define 'Bitcoin'. Some say that if several community members—from node operators and core developers to miners and investors—reach a consensus to hard fork by transitioning to a new chain, theoretically, this could change.
Developers may first propose a suggestion to spark community discussion to understand consensus before implementing rule changes into the Bitcoin core. This would lead to a hard fork, and community members would need to decide which new rules they want to transition to. If the vast majority of node operators and miners begin to support the new fork and gain more market share and hash rate, they will operate under a supply-unrestricted 'new' Bitcoin network.
However, Super Testnet stated that while this is possible, the resulting new chain would not be 'Bitcoin'. It emphasized that Satoshi Nakamoto, the 'father of Bitcoin', pointed out in the 2019 Bitcoin white paper: 'The inflation cap is definitive for Bitcoin. If this is removed, what you have is no longer Bitcoin; you might as well ask how to turn Bitcoin into PayPal.'
The former largest cryptocurrency exchange 'dumped' $102.5 million.
On Thursday, on-chain intelligence firm Arkham Intelligence posted that Mt. Gox transferred $102.5 million worth of Bitcoin after the Fed's interest rate cut meeting. The post also noted that this large amount of Bitcoin was divided into three separate transactions, sent to three different addresses, each transaction worth $30.18 million.
However, Arkham pointed out that the remaining Bitcoin is still held by Mt. Gox. These transactions from the defunct cryptocurrency exchange seem to have a significant impact on the cryptocurrency market. Mt. Gox needs to distribute billions of dollars worth of Bitcoin to its creditors, which severely affects Bitcoin's price and the overall cryptocurrency market.
Current market sentiment seems extremely pessimistic, with traders and investors panicking due to billions of dollars in liquidations. According to on-chain analysis firm Coinglass, the recent market crash led to the liquidation of $1.18 billion in long and short positions.
Most liquidations came from long positions, with traders holding $900 million worth of long positions being liquidated. In contrast, the cryptocurrency market only saw $160 million in short liquidations in the past 24 hours.
Bitcoin Technical Analysis
This indicates that Bitcoin is facing strong negative pressure, attacking the support line of the bullish channel and trying to stay below it.
This prompts caution among people regarding the upcoming trades, as a confirmed breakout would halt the bullish wave and push prices for a bearish correction, with the first target at $95,195.
