Executive Summary
Bitcoin trades at $780.65 on December 13, 2016, cementing a remarkable rally that has seen the cryptocurrency appreciate more than 80% since the start of the year. The price action comes less than six months after the second block reward halving, which reduced mining output from 25 to 12.5 BTC per block. With daily new supply now constrained at approximately 1,800 BTC and demand showing no signs of abating, market participants increasingly view $800 as the next psychological barrier — and potentially just a waypoint on a much larger move heading into 2017.
The Numbers Unpacked
Bitcoin opened December 13 with a high of $788.46 and a low of $777.96, trading in a relatively tight range that suggests consolidation rather than exhaustion. The 24-hour trading volume registers at approximately $81.6 million, a healthy figure that indicates sustained market interest. At current prices, Bitcoin’s total market capitalization stands near $12.5 billion, maintaining its dominant position as the world’s largest cryptocurrency by a wide margin.
The price of $780 represents a dramatic recovery and extension from the $580-$680 range that characterized the weeks immediately following the July halving. The initial post-halving period saw uncertainty as miners adjusted to reduced revenue, but the market quickly found its footing as institutional interest grew and Chinese trading volume accelerated. The current price level represents Bitcoin’s highest sustained value since the 2014 bear market began.
Historical Context
The 2016 rally draws inevitable comparisons to the 2013 bull run that took Bitcoin from $100 to over $1,100. While the magnitude of this year’s gains falls short of those explosive moves, the underlying dynamics differ in important ways. The 2013 rally was driven largely by speculative fervor around Chinese adoption and the Mt. Gox exchange, culminating in a dramatic bust. The 2016 appreciation, by contrast, unfolds against a backdrop of genuine infrastructure development: growing exchange ecosystems, improved wallet technology, and increasing acceptance of Bitcoin as a legitimate asset class.
The halving narrative provides additional structural support. The first halving in November 2012 reduced the block reward from 50 to 25 BTC and preceded a massive bull run in 2013. While history does not repeat exactly, the supply shock creates a fundamental imbalance between new BTC production and market demand that takes months to fully price in. The second halving’s effects may still be unfolding, with the most significant price appreciation potentially still ahead.
Notably, Bitcoin’s performance in 2016 far outpaces traditional assets. The S&P 500 returns approximately 10% year-to-date, gold holds relatively flat, and most major currencies trade sideways against the dollar. Bitcoin’s 80% gain places it among the best-performing assets of the year by a substantial margin.
Expert Consensus
Analysts and market commentators express growing confidence in Bitcoin’s trajectory. Vinny Lingham, co-founder and CEO of Civic, has publicly predicted a rapid move past $800 once the resistance level is breached, citing the compressed supply dynamics post-halving. His analysis suggests that the $800 level represents more of a psychological barrier than a technical one, and that a clean break could trigger a cascade of buying pressure.
Chinese exchange activity continues to drive significant volume, with platforms like OKCoin, Huobi, and BTCC accounting for a substantial portion of global Bitcoin trading. The yuan-denominated premium on Chinese exchanges suggests strong domestic demand, potentially driven by capital flight concerns as the Chinese yuan weakens against the dollar. This macroeconomic dimension adds a layer of support that goes beyond pure cryptocurrency fundamentals.
Institutional interest also grows, though it remains modest by later standards. The Bitcoin Investment Trust (GBTC) by Grayscale provides accredited investors with exposure to Bitcoin through traditional brokerage accounts, and its premium to net asset value indicates strong demand from the wealth management sector. While institutional capital flows remain a trickle compared to the flood that would arrive in later years, the foundation is being laid.
Forward Outlook
The immediate question on traders’ minds is whether Bitcoin can break and hold $800 before year-end. Technical indicators suggest the momentum favors the bulls. The moving averages align in a bullish configuration, and the volume profile supports further upside. Resistance at $780-$788 has been tested repeatedly, and each test weakens the selling pressure.
Looking further ahead, 2017 promises to be a pivotal year for Bitcoin. The scaling debate, which has simmered throughout 2016, approaches a decision point as competing proposals for increasing block size or implementing Segregated Witness vie for miner support. The outcome of this governance challenge could significantly impact Bitcoin’s price trajectory, either unlocking new utility and demand or creating uncertainty that tempers the current rally.
For now, the fundamentals align favorably. Restricted supply, growing demand, favorable macroeconomic conditions, and improving infrastructure all point toward continued appreciation. Bitcoin at $780 may well be looked back upon as a bargain in hindsight. The post-halving supply squeeze is real, and its effects are only beginning to be felt in earnest.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrency markets are highly volatile, and past performance does not guarantee future results. Always conduct your own research before making any investment decisions.
BTC at 780 six months post-halving with 1800 daily supply. that same supply squeeze logic is what everyone is betting on for 2024 halving too. 80% rally YoY in 2016 vs the current cycle is wild to compare
Stellan H. 81.6M daily volume at 780 BTC. now we do billions a day. the 12.5 BTC block reward era was the golden age for miners who held
80% YTD gains and the halving supply cut was barely 6 months old. 1800 BTC/day new supply with rising demand = obvious outcome
$12.5B market cap and people thought it was huge. We were so early it hurts to look back
we thought $12.5B was massive. now BTC does that in daily volume on a slow tuesday. perspective is brutal
80 percent ytd at 780 post halving with only 12.5 btc per block and 1800 daily supply is the real squeeze
Krzysztof P. $12.5B total market cap. now BTC ETFs alone pull in more than that in a week. crazy how early everyone was
supply_squeeze called it. 1800 BTC per day against rising demand was textbook economics. same story every halving cycle
miners had just seen their revenue cut in half. 1800 BTC/day was the new ceiling and demand was climbing. basic supply demand with a 4 year clock
12.5b market cap and 81.6m daily volume at 780.65 looks tiny now but the halving math was already working
halvening_ 1800 BTC per day at 12.5 per block. now we are at 450 post 2024 halving and the supply squeeze thesis only gets stronger each cycle
s21_retro 450 BTC per day now and price is way higher. the supply squeeze thesis just keeps compressing every halving
The $580 to $680 range dragged on forever before this breakout. $800 felt like a massive wall at the time, now its basically noise
that $788 to $777 trading range shows how tight the consolidation was. boring price action before the explosion
$780 BTC with 81M daily volume. now we do 81B on volatile days. 1000x in liquidity in less than a decade
jana the 1000x liquidity argument is exactly why comparing old price action to today is pointless. you cant even buy the same market
81.6M daily volume at 780 BTC. Kraken alone does more than that in an hour now. the liquidity growth is the real story nobody focuses on
supply down to 12.5 per block six months in and price still climbing toward 800
81.6M daily volume. now we do that in minutes. the growth since then is hard to wrap your head around
80% YTD and people were still calling it a bubble at 780. same energy as the 100k finger-pointers today
1800 BTC daily supply after the halving and demand barely blinked. the squeeze was mathematically inevitable
mining_diaspora inevitable is a stretch. plenty of halvings where the price dumped before the supply shock kicked in. 2016 was special because demand showed up
Rune H. demand showing up is doing heavy lifting here. 2016 was also the year China capital controls kicked in and BTC was the only exit valve for a lot of that money
80% YTD post-halving and people were still calling 780 a top. same psychology every cycle, just different price levels
Claudiu P. the 12.5 BTC block reward era was the last time retail could realistically mine profitably at home. S9 era was the golden age for small operators