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At the time of writing, there are less than three hundred blocks left before Bitcoin’s fourth halving. With blocks generated on average every 10 minutes, we have less than two days left before we witness this historic moment. As one of the most important moments in crypto industry narratives, Bitcoin’s halving is seen as a key catalyst in propelling the market into a new uptrend, and it also indicates an imminent primary shift in the Bitcoin mining landscape.
Why does Bitcoin’s halving have such a big impact on the overall market?First, we want to understand the basics behind halving.
One of the main reasons why Bitcoin is superior to classic fiat currencies is its inherent scarcity. This scarcity is encoded in its founding code through its creator, Satoshi Nakamoto, who stipulated that every 210,000 blocks mined would result in a 50% relief in mining rewards, until the total flow reached 21 million BTC. This procedure is called “halving” and mimics the natural depletion of gold mining rates, giving Bitcoin a scarcity price similar to gold.
At the same time, the design of the halving mechanism ensures that miners play a role as the cornerstone of the operation of the entire Bitcoin network. Whenever miners effectively mine a new block through competition, they get a certain amount of BTC as a block reward. This procedure is also the only way for new BTC to enter the market.
Since the halving directly affects miners’ profits, this means that all players in the Bitcoin mining industry will have to deal with profit adjustments while operating prices such as site services and electric power remain largely fixed. This will require participants to think again and adjust their trading strategies.
Reports suggest that currently, most participants in the mining sector use inefficient miners. To maintain healthy gross margins after Bitcoin halves, those miners will have to keep their prices constant at $0. 05 per kilowatt-hour or less. In response, some miners have already begun taking action. According to Bloomberg, around 600,000 former Bitcoin mining rigs are moving from the United States to Africa and South America, regions known for their cheaper electricity.
If we look at the existing global distribution of Bitcoin’s hashrate, the challenge of strong centralization is remarkable. A few countries led by the U. S. The U. S. owns the lion’s share of the world’s hashrate. However, driven by the continued pursuit of profitability, adding the reduction of electric power costs, it is possible that the industry will gradually shift to a more globally dispersed model.
To remain competitive after Bitcoin was halved, many primary mining corporations started buying more effective mining rigs, such as the latest generation of Antminer S21. Not only do these new miners have a higher hash rate, but they also reduce energy consumption, which reduces mining costs. , the arrival of those new miners, as well as the stable accumulation of hashrate, is making mining complicated for small-scale miners.
Since Bitcoin’s recent maximum mining difficulty adjustment to a block height of 838,656, the overall network difficulty has reached 86. 39T, setting a new all-time high, a high double that of a year ago. With less than two days to go until Bitcoin is halved, the number of Bitcoins that can be mined will soon be reduced to 50%, meaning that miners will be forced to increase their hashrate to ensure that they can mine enough BTC for their operations.
Faced with declining mining profits, miners with higher prices would possibly have to temporarily shut down their mining rigs until there is a significant increase in Bitcoin values. Currently, market conditions are very unfavorable for miners, with Bitcoin’s status value at $62,000 at the time of writing, having fallen more than 10% in the last seven days.
For miners with sufficient cash flow, even if Bitcoin’s existing value doesn’t cover mining costs, they can comfortably get by while waiting for Bitcoin’s values to rise. However, for miners with tight cash flows, they may want to sell something. of the Bitcoin they mine on a basis to cover operational costs. If Bitcoin’s values don’t increase accordingly after halving, it will put them under a lot of monetary pressure.
For miners with inadequate liquidity reserves, there is no need to be too pessimistic, as some monetary tools available in the market can also help manage the risk of price fluctuations caused by Bitcoin halving. For example, as the “Crypto Loans” and “Hedging Service” presented through ViaBTC can supply the mandatory asset control equipment for those miners.
In the run-up to Bitcoin’s halving, Bitcoin’s value recently began to vary frequently. Miners don’t have to worry about the uncertainty of the coins’ value in the long run, as they can use those two monetary teams presented through ViaBTC to drive the market. Changes. If miners are bearish on Bitcoin’s value after the halving, they can use the “hedging service” by borrowing coins from ViaBTC and promoting them in advance to secure profits and then continue mining to pay back the borrowed coins. If miners are positive about Bitcoin’s long-term value but want money to cover their day-to-day operating expenses, they can use “crypto loans” by pledging to borrow a portion of their assets from ViaBTC, repay the loan, and then redeem their collateral later.
Founded in May 2016, ViaBTC Pool has grown to become the third-largest Bitcoin mining pool, with a cumulative mine output price of tens of billions of dollars. It has provided professional, efficient, secure, and robust cryptocurrency mining facilities to over a million users. in more than 130 countries/regions around the world.
Historically, every Bitcoin halving has been a major brake on the Bitcoin mining industry, and ancient knowledge also shows that each halving has led to significant appreciation in Bitcoin’s value. However, only miners who achieve “” can witness the Dawn of the market after the halving. Whether or not this halving follows old patterns, miners’ immediate priority is to locate tactics for as long as possible.
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