Here we are on the eve of only the second “Bitcoin Halving” and there is an immense amount of speculation around what will happen. When I wrote my Bitcoin 2016 post in early May, the price was $450 and I speculated that after the halving, it would hit $1,000 by the end of the year. I clearly wasn’t the only one who believed that the halving would have an impact and the price ran up to around $770 last month, but then came crashing down to mid $500’s and is now in a broad consolidation range. Given the liquidity that sits outside the traditional exchanges and lives within the Bitcoin OTC market, the price will continue to be volatile until more coins are traded via a transparent marketplace — which may take months or years. We can’t plan around that.

I’m constantly perplexed at how the brightest people in the world can be so blinded by their previous successes in Bitcoin, that they now believe the long term implications of halving day will have no material impact either on their business, or the market in general.

As an example, I’ve spoken to a number of miners. They all believe that halving day is not going to impact them by much (just a 50% drop in revenues!!). Now, let’s extrapolate. If you spoke to every single miner out there today and asked them where they rank in terms of mining efficiency and costs structure for their business, I almost guarantee you that the majority would all claim to be “above average”. It’s impossible for everyone to be above average — and therein lies the rub. This is known as the Lake Wobegon Effect.

In order for us to see the impacts of the halving, the price of Bitcoin needs to be stable and centered around a $600 price point, in my opinion (based on some data that I’ve been looking at)— any more and the impact will be less and any lower, and the impact will be more pronounced. After halving, the effective revenue per block would be the same as a $300 price point pre-halving. That’s going to impact a lot of miners and the ecosystem in general. They all can’t compete profitably — as much as they think they can. The only way they can is if the price rises quickly enough to make up for the drop in the rewards, but if $7oo truly is a wall, then it’s going to represent a lot of pain for miners.

Brian Armstrong, the CEO & Founder of Coinbase wrote a post earlier this year about a potential Doomsday Scenario. It’s a good read and I don’t think it can be dismissed as impossible — unlikely, sure, but not impossible. Cooler heads will most likely prevail and there may indeed be a hard fork that comes out of the halving day as other have predicted, but it doesn’t matter — Bitcoin will continue.

So what’s going to happen after halving day? No-one knows. That’s the point. If you think you do, you are guessing. You may be right, but only because the dice rolled in your favor. It could easily go another way. Everything is this post is just conjecture and I accept that I may be wrong or I may be right.

There are countless other doomsday scenarios out there and an equal amount of “to the moon” predictions — which means that it’s not 100% certain that “everything will be ok” — we live in a probabilistic environment.

That being said, I felt that it’s worth weighing in on what I think should happen and how I believe the market should react, if everyone wanted Bitcoin to succeed in the long term and all information was available to all participants (clearly not the case).