How will Bitcoin halving affect the cryptocurrency market?
The Bitcoin Halving – How Will It Impact the Cryptocurrency Market?
One of the most significant events in the world of cryptocurrencies is the Bitcoin halving, which involves reducing the block rewards by half, leading to decreased profitability of cryptocurrency mining. The upcoming Bitcoin halving, which is expected to decrease the block rewards from 6.25 to 3.125 BTC, could have an unprecedented impact on the market.
Bitcoin’s Computing Power Reduction
Following the Bitcoin halving, which is projected to halve the block rewards and leave only the most efficient mining machines operational, up to 20% of the current Bitcoin computing power (hash rate) may be shut down. By the end of 2023, over 70% of Bitcoin’s computing power was coming from eight ASIC mining rig models.
Expert Predictions
By analyzing future electricity prices and mining rig breakeven points, Galaxy Research predicts that 15 to 20% of the computing power at risk of being shut down will come from ASIC mining rig models. It is foreseen that older mining rig models like Bitmain S9, Canaan A1066, and MicroBT M32 will be shut down, with around half of the MicroBT M20S and Bitmain S17 models continuing to operate.
Survival of the Latest Mining Rig Models
The latest and popular models like Antminer S19 and S19J Pro are expected to largely survive, along with Canaan A1246. Older models may face shutdown unless upgraded with custom software, and some might be acquired by other operators with lower electricity costs. The Bitcoin halving is scheduled to occur at block number 840,000, which is estimated to be mined around April 20.
Despite the uncertainties surrounding the Bitcoin halving, the cryptocurrency market continues to evolve, bringing forth new opportunities and challenges for investors and miners. The effects of the halving will be closely monitored, but one thing is certain – this process is pivotal for the future of Bitcoin and the entire cryptocurrency market.
