Bitcoin miners could liquidate $5b in BTC post-halving

by

Market experts estimate that approximately $5 billion in Bitcoin could be sold by miners following the upcoming halving event, based on historical patterns.

Based on Markus Thielen’s calculations as the head of research at 10x Research, mentioned in a note on April 13, it is estimated that bitcoin miners could sell around $5 billion worth of Bitcoin after the upcoming halving event.

“He mentioned that the impact of this recent selling could persist for up to four to six months, leading to potential price stability or minimal changes in Bitcoin’s value during the upcoming period – a trend observed after previous halvings,” is one possible paraphrase.

Thielen is of the opinion that similar events may recur, as crypto markets could encounter a tough period during the six-month summer slump.

For five months after the 2020 Bitcoin halving, its price fluctuated between $9,000 and $11,500.

In the current year, the cryptocurrency halving is expected to occur roughly around April 20th, which is just six short days from now. Consequently, significant price surges in the markets might not materialize until approximately October, assuming historical trends hold true.

Additionally, miners tend to save Bitcoin prior to the halving event, causing an unequal balance between supply and demand and ultimately driving Bitcoin prices up. (Miners prefer hoarding Bitcoin before the halving, resulting in a discrepancy in supply and demand that pushes Bitcoin prices higher. – Alternative 1)

In the year 2024, Bitcoin’s value experienced a significant surge, increasing by an impressive 74% and reaching a new peak of $73,734 on March 14th. However, this upward trend took a downturn around mid-April, causing the value to dip below $63,000.

Thielen additionally noted that altcoins have experienced a larger decline from their 2021 highs compared to Bitcoin. Contrary to expectations of an altcoin surge following the Bitcoin halving event, Thielen looked back at historical data indicating such a rally usually emerges approximately six months afterwards.

Regarding particular Bitcoin mining activities, Thielen pointed out that Marathon, the leading Bitcoin miner globally, has amassed a stockpile anticipated to be progressively offloaded following the halving event to prevent substantial revenue decline. At present, Marathon extracts around 28-30 BTC daily. Post-halving, this translates to an extra supply of approximately 133 days for the market, with continuous production amounting to around 14-15 BTC per day.

After analyzing the mining industry, Thielen predicted that if miners uniformly follow this approach, approximately $104 million in Bitcoins could be put up for sale every day following the halving event. This massive influx of Bitcoin could disrupt the current market dynamics and possibly halt the price surge caused by the supply-demand imbalance.

Around the beginning of May, the reward for Bitcoin “miners” who validate transactions will decrease from 900 to 450 per day. This reduction, called the halving, is expected to occur around April 20th. The current Bitcoin price may lead to approximately US$10 billion in annual revenue losses for the mining industry as a whole.

Marathon Digital Holdings, CleanSpark, and other Bitcoin miners are striving to counteract revenue decreases by investing in new machinery and attempting to buy out smaller competitors in a bid to secure a constant Bitcoin reward through solving intricate mathematical problems with high-speed computers.

“Matthew Kimmell, an expert in digital assets at CoinShares, commented that this is the last opportunity for miners to make substantial profits from their operations before facing significant declines in production.”

“The sudden decline in revenues for all miners may force different reactions. Those able to effectively adjust and respond could potentially thrive, while others risk falling behind.”

Recently, Peter Thiel, Marathon’s CEO, shared that the business aims to reach profitability with Bitcoin’s price at approximately $46,000 post-halving, assuming minimal price fluctuations during the subsequent half-year period.

Historically, a significant bullish trend has typically emerged following a Bitcoin halving. While there may be some price fluctuations immediately after the halving event, this period is generally expected to set the stage for an extended bull run in Bitcoin’s price. (Alvin Kan, COO at Bitget Wallet, shared his insights with Crypto.news)

Kan stated that Exchange-Traded Funds (ETFs), specifically Bitcoin ones, are significantly impacting market trends. Following the SEC’s approval in January, these Bitcoin ETFs have seen an astonishing inflow of $56.27 billion in total, setting a new record for the fastest growth within the ETF sector. This surge in investments has played a significant role in pushing Bitcoin to reach new all-time highs during the early stages of the bull market.

“He believes that the inflow of money into Bitcoin ETFs will continue to be strong after the halving event. In fact, it could even grow as investors seek to capitalize on the historical price increase following a Bitcoin halving.”

Read More

2024-04-15 13:14