Bitcoin halving speculation: Which miners will leave? When will the price rise?

With less than three weeks to go until the block reward of Bitcoin, the largest cryptocurrency by market value, is halved, crypto media Cointelegraph has published an article analyzing the attitudes of crypto miners and price trends after the halving.

The article states that as the date of Bitcoin halving approaches, the event is gaining more and more attention on search engines, and people's expectations are also increasing. Miners of Bitcoin Cash and Bitcoin SV, which have previously experienced halving, are also investing their computing power in the more profitable Bitcoin network.

Although some experts believe that halving may have a significant impact on the spot price of Bitcoin based on past experience, the global situation in 2020 is more complicated, with the spread of the COVID-19 pandemic and global market fluctuations. What is even more unoptimistic is that Bitcoin Cash and Bitcoin SV, which completed the halving of block rewards on April 8 and April 10 respectively, saw a significant drop in network hash rate after the halving due to the loss of crypto miners.

In terms of price, the halving did not drive any gains for either cryptocurrency, in fact the spot prices of Bitcoin Cash and Bitcoin SV fell by 15% and 10% respectively.

Ali Beikverdi, CEO of South Korean crypto firm bitHolla, believes that miners will react differently to Bitcoin’s halving than they do to Bitcoin Cash and Bitcoin SV, both of which Beikverdi believes are “extremely centralized” and therefore unsuitable for making predictions about the upcoming Bitcoin halving.

In terms of mining, Bitcoin Cash’s hashrate is controlled by mining pools owned or backed by heavyweights like Roger Ver and Bitmain’s Jihan Wu, and the same is true for Bitcoin SV, where hashrate is dominated by mining pools backed or owned by Craig Wright and billionaire Calvin Ayre, among others.

Currently, although many miners are investing their computing power in Bitcoin, they are likely to return to the Bitcoin Cash and Bitcoin SV networks when Bitcoin completes the block reward halving in three weeks.

Another problem that halving brings to miners is that they must improve efficiency to maintain profits. Some Chinese miners have prepared more advanced mining machines, but some smaller miners may find that their competitiveness is increasingly threatened. Beikverdi emphasized that "after each halving, Bitcoin miners always suffer a huge impact, but then the miners will slowly recover."

He also mentioned that the departure of small miners will not happen overnight because, "It should be noted that miners cannot quickly unwind their business operations and usually have to abide by their energy contracts. This means that it may take 6 to 12 months for miners to complete the energy contracts they have. Mining usually has a 6 to 12 month business cycle, and it will take some time for weaker miners to go bankrupt."

From the market point of view, while miners are providing computing power to protect network security, Bitcoin holders seem to be hoarding Bitcoin. Cryptocurrency exchanges recorded a large amount of capital outflow in April, which may indicate that Bitcoin owners are inclined to hold for the long term. In addition, some US cryptocurrency owners will also use the economic stimulus funds they received to buy Bitcoin.

Joe DiPasquale, CEO of crypto hedge fund BitBull Capital, believes that the upcoming Bitcoin block reward halving will likely continue to have a positive impact on Bitcoin spot prices. He mentioned, "The upcoming Bitcoin halving may have a positive impact on Bitcoin's price in the next 12 to 18 months. The last two Bitcoin halvings saw a significant appreciation in price, the first achieved a 1,000-fold gain in a year, and the second halving took longer but brought greater returns."

However, he believes that this time the rise in Bitcoin prices may be slower than people expect, because "cryptocurrency is a market driven by individual users, and there are still too many uncertainties about the impact of demand for cryptocurrency in the Western and Asian markets."

Image source: pixabay

AuthorLiang Che

This article comes from bitpush.news. Reprinting must indicate the source.