As the fourth Bitcoin halving approaches in five short days, there are indications that miners may be readying themselves to sell a significant amount of Bitcoin. In a recent research note from 10x Research, headed by Markus Thielen, it was suggested that this sell-off could reach an impressive $5 billion.
“According to him, the aftermath of this selling could persist for up to six months, which might cause Bitcoin to move laterally for some time – a pattern observed in the past after Bitcoin’s halving events.”
Thielen thinks that crypto markets could encounter a tough period around for six months starting from summer this year. With Bitcoin’s halving set for April 2024, it’s possible that the price won’t show any significant increase until October this year.
On the other hand, miners continue to stock up their BTC supplies ahead of the halving with an exactly similar situation panning out this time as well! We have already witnessed strong miner accumulation during the past few months as the Bitcoin price rallied 74% this year hitting an all-time high of $73,734.
In Thielen’s research, he mentioned that Marathon Digital, the biggest Bitcoin miner in the world, has stockpiled sufficient Bitcoin for sales following the halving event. This precautionary measure would safeguard the miner from encountering a sudden revenue drop.
Marathon currently mines between 28 and 30 Bitcoins each day. This equates to roughly an extra 133 days’ worth of Bitcoin joining the market, on top of what they already produce. After the halving event, their daily output is projected to drop to around 14 or 15 Bitcoins. Thielen noted that other miners are expected to adopt a similar approach and sell off a portion of their mined Bitcoin gradually.
Bitcoin Miners to Face $10 Billion in Losses
An earlier analysis indicated potential losses of approximately $10 billion for Bitcoin miners following the next halving event. This forthcoming adjustment in the Bitcoin system will decrease the daily payment given to miners confirming transactions, from 900 to 450 Bitcoins.
Based on Bitcoin’s current worth, such an adjustment may result in a yearly revenue decrease of around $10 billion for the Bitcoin mining sector. To counteract this financial setback, major players like Marathon Digital and CleanSpark are making significant investments in new machinery and buying out smaller competitors. As reported, Matthew Kimmell, a digital asset expert at CoinShares, commented on the situation.
Miners are making a last-ditch effort to maximize profits from their operations, as their revenue streams are expected to take a significant hit. Simultaneously, declining revenues have affected all players in the industry, necessitating strategic adjustments. The ability of each miner to adapt and respond effectively could ultimately determine which ones thrive and which ones struggle.
Certain investors believe that after the Bitcoin halving, the shares of mining companies may experience a decline in value as well.
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2024-04-15 11:39