- Bitcoin halving cycle is due in 2024, only a few months out to April or May 2024.
- While traders anticipate the cycle, miners are disconcerted.
- The event, which may kickstart the next bullish phase for BTC, could have devastating implications for miners.
Bitcoin (BTC) halving is a narrative that cryptocurrency traders and investors highly anticipated because of its characteristic ability to kickstart a new phase of bullish momentum for the flagship crypto, surpassing the peak prices recorded in the previous cycle to record a new all-time high.
Also Read: XRP retail holders made biggest winners from Torres' decision, technology policy expert says
Bitcoin halving countdown continues
Bitcoin (BTC) halving countdown continues, around eight months out, but traders and investors alike remain on the edge of their seats waiting to see what the new cycle will achieve. In every cycle that has passed, the event brings a fresh start to the yearlong bullish market, with Bitcoin price recording a new all-time high, preceding another yearlong bear market.
The bear market is followed by a two-year recovery period as the price attempts to reclaim the all-time high. This is where the BTC market currently stands, and investors cannot wait.
Bitcoin Halving Cycle
What is Bitcoin Halving?
Bitcoin halving is an event where the rewards for mining BTC tokens are cut in half. With every cycle, the impact of individual halving events continues to diminish as the block reward procedurally edges toward zero. The objective of a halving activity is to slow down the rate of generating new coins, thereby lowering the available amount of tokens in supply.
The previous Bitcoin halving event occurred on May 11, 2020, with the next one slated between April and May 2023. The final one is estimated for 2140, 117 years ahead. This estimate is based on the calculation that by this time, the number of BTC tokens in circulation will have attained the maximum supply of 21 million. The current circulating supply is 19,440,787 BTC, based on CoinMarketCap data.
While traders anticipate the 2024 Bitcoin halving and its expected impact to pump BTC price, miners do not share in the same sentiment. On the contrary, BTC miners and mining companies' are feeling unsettled.
The miners, serving as validators to secure the network and process transactions, receive incentives to keep the operation running. These incentives are called block rewards. Specifically, by mining a single BTC token, the miner adds one block to the blockchain. The incentive for this single block is 6.25 Bitcoin tokens. Based on current rates ($29,210), this is approximately $182,562.
Post-halving, miners will receive 3.125 Bitcoin tokens (half of 6.25) for every successful block added to the blockchain. This translates to about $91,281. The drop in mining rewards is part of the reasons why miners are fretting over the oncoming event, as it means their revenue source will suffer a 50% slash.
Why BTC miners are disconcerted over Bitcoin halving
It makes sense for a trader or investor to assume that a 50% slash in mining rewards is a reasonable sacrifice considering the event in itself serves to increase the value of Bitcoin. This means that even the 3.125 block reward could account for more than the rewards when incentives added up to 6.25 BTC tokens.
However, from a miner or mining company's standpoint, it is a stark value loss, considering the operating expenses required to mine Bitcoin. The infrastructure required to mine Bitcoin has increased in price over time, with mining equipment costing more now, electricity rates going higher, and the fact that there are deliberations for a 30% mining tax to be imposed on miners in the US specifically.
Notably, Bitcoin's hash power, the power that a computer or hardware uses to run and solve different hashing algorithms, is mostly concentrated in the US.
Also Read: Bitcoin price heedless as institutions that know markets better than anybody wager on BTC mining
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
TRON gains 10% in 2024, supply of stablecoins reaches over $50 billion in Q1
TRON, a blockchain-based digital platform, has seen positive growth in the first quarter of 2024, as seen in a Messari report. TRON noted gains across several metrics like market capitalization, revenue and total value locked.
XRP hovers near $0.50 as Ripple CTO addresses concerns related to stablecoin launch
XRP is hovering near $0.53 on Friday, spending nearly all week below $0.55. Ripple CTO David Schwartz addressed concerns on stablecoin and XRP utility on Thursday.
Terraform Labs set to restrict access for users in the US after recent ruling in SEC lawsuit
Blockchain company Terraform Labs said Thursday that it will restrict access to some of its products and services for US-based users as it expects to receive a court order soon in light of its legal battle against the US Securities and Exchange Commission (SEC).
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s (BTC) recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Bitcoin: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s (BTC) recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.