On Friday (December 20), Bitcoin rebounded after plummeting to $96,000, with short-sellers briefly taking control, as global asset management giant BlackRock, managing $10 trillion, rarely issued a disclaimer stating it cannot guarantee that Bitcoin's total supply remains at 21 million, sparking community controversy. After the Federal Reserve's interest rate cut meeting released hawkish signals, the former largest cryptocurrency exchange Mt. Gox unloaded $102.5 million worth of Bitcoin.
BlackRock: Cannot guarantee that Bitcoin's total supply of 21 million remains unchanged
CoinTelegraph pointed out that after BlackRock released a 3-minute explanatory video on Bitcoin and added a disclaimer stating that it cannot guarantee that Bitcoin's supply cap of 21 million coins will not change, the debate about whether the total supply of Bitcoin is truly fixed resurfaces.
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 cryptocurrency.
In the December 17 video, BlackRock explained that Bitcoin's fixed supply is 21 million, adding that 'hard-coded rules govern supply and purchasing power and help prevent potential abuse by printing more currency.' However, it also added a disclaimer: 'There is no guarantee that the supply cap of 21 million Bitcoin will not change.'
Subsequently, Michael Saylor, chairman of the largest Bitcoin publicly traded whale MicroStrategy, retweeted the video, leading some critics to claim 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 that Bitcoin has not been hijacked.'
Anonymous Ethereum developer Antiprosynthesis added: 'BlackRock understands Bitcoin better than Bitcoin holders.'
Bitcoin developer Super Testnet behind BitVM indicated that whether Bitcoin's supply cap can be changed depends on how people define 'Bitcoin.' Some argue that if several community members—from node operators and core developers to miners and investors—reach a consensus by hard forking to a new chain, then theoretically, the situation could change.
Developers may first propose a proposal 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 set of rules they want to transition to. If the vast majority of node operators and miners start to support the new fork and gain more market share and hash rate, they will operate under a 'new' Bitcoin network with no supply restrictions.
However, Super Testnet stated that while this is possible, the new chain that emerges would not be 'Bitcoin.' It emphasizes that Satoshi Nakamoto, the 'father of Bitcoin,' pointed out in the 2019 Bitcoin white paper: 'The inflation cap is definitional for Bitcoin. If that is removed, what you have is no longer Bitcoin; you might as well ask how to turn Bitcoin into PayPal.'
Former largest cryptocurrency exchange 'unloads' $102.5 million
On Thursday, on-chain intelligence company Arkham Intelligence posted that Mt. Gox transferred $102.5 million worth of Bitcoin after the Federal Reserve's interest rate cut meeting. The post also noted that this substantial amount of Bitcoin was split into three separate transactions, sent to three different addresses, each worth $30.18 million.
However, Arkham pointed out that the remaining Bitcoin is still held by Mt. Gox. These transactions from the now-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 heavily affects the Bitcoin price and the entire cryptocurrency market.
Current market sentiment appears extremely bearish, with traders and investors panicking due to billions of dollars in liquidations. According to data from on-chain analysis company Coinglass, the recent market crash led to liquidations of long and short positions worth $1.18 billion.
Most of the liquidations came from long positions, with traders holding long positions worth $900 million being liquidated. In contrast, the cryptocurrency market saw only $160 million in short liquidations in the past 24 hours.
Bitcoin Technical Analysis
Economies.com stated that Bitcoin faces strong negative pressure, attacking the support line of the bullish channel and trying to stay below it.
This prompts caution regarding upcoming trades, as confirming a breakout would halt the bullish wave and push prices into a bearish correction, with the first target set at $95,195.
