The Bitcoin halving event is scheduled to take place between April 19th and 20th, 2024. The event, which is held every four years, reduces the block subsidy to Bitcoin miners from 6.25 BTC to 3.125 BTC, effectively halving the reward miners receive for their work. Nevertheless, there is a possibility that miners will refrain from sales activities this time, and exceptions will arise in the aftermath of the event.
Bitcoin miners may act differently this time
Cryptominers, the group most affected by the Bitcoin (BTC) reward halving, are in a stronger position this time around due to the cryptocurrency's price rally over the past six months. The reward halving is a quadrennial event that reduces the growth rate of Bitcoin supply by 50% and is expected to take place late tonight or early tomorrow (UTC). The recent rise in his BTC price may bring temporary relief to many of the Bitcoin network's inefficient miners.
Given Bitcoin’s recent strong performance, the role of halving in phasing out inefficient mining rigs and reducing network hashrate is expected to be less important than it would have been in the absence of price increases. . Over time, the impact of the halving on the economics of Bitcoin miners could lessen if historical patterns hold and there is strong price appreciation in the months following the event.
A recent CryptoQuant post states that heavy selling pressure from miners is a common trend with each cycle of decreasing BTC issuance. This behavior is tracked by his metric Miner-to-Exchange Flow, which monitors the transfer of Bitcoin from miners to exchange-linked wallets and serves as an indicator of potential sales.
There was a noticeable increase in this metric during the 2020 halving, suggesting that miners were actively selling Bitcoin in anticipation of a decline in revenue. However, current data indicate that this pattern is not emerging this time, even though there are several hours of half-life left. This suggests that miners may have already been selling earlier this year, particularly in February following Bitcoin's solid rally, which would ease selling pressure from miners post-halving. there is a possibility.
Impact on Bitcoin mining stocks
Halving Bitcoin mining rewards would not only reduce miners' profits but could also impact stock prices. Shares of mining companies such as Marathon Digital, Riot Platforms, Hut8, Cipher Mining, and TerraWulf fell about 20% following the economic downturn that began on April 8, but have since rebounded slightly.
While rising Bitcoin prices may lessen the impact of reduced rewards, miners are also adopting long-term strategies to address potential revenue gaps. These include leveraging low-cost renewable energy sources such as wind and solar, and innovative projects to convert methane from landfills into energy. Miners are also using the excess heat generated by their rigs in industries such as agriculture to further reduce costs and diversify their sources of income.
Cryptocurrency exchanges' Bitcoin reserves fell from 1.8 million to 1.73 million last month, a sign that investors are stockpiling Bitcoin in anticipation of price increases after the halving.
