With just five days left ahead for the fourth Bitcoin halving, BTC miners could be preparing for a major dump going ahead. In a recent research note, Markus Thielen, the head of research at 10x Research, stated that Bitcoin miners could potentially sell off a staggering $5 billion worth of Bitcoin after the halving event in 2024.
Markus Thielen added, “The overhang from this selling could last four to six months, explaining why Bitcoin might go sideways for the next few months, as it has done following past halvings.” Historically, the Bitcoin prices have remained range-bound for months together following the halving event.
Thielen believes that a similar situation could pan out ahead with the crypto markets potentially facing “a significant challenge in a six-month ‘summer’ lull”. Thus, with the Bitcoin halving 2024 scheduled on April 20, we may not see any upward potential trajectory in the BTC price 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 the research report, Thielen stated that the world’s largest Bitcoin miner Marathon Digital has built enough inventory to sell after the Bitcoin halving event. This would prevent the Bitcoin miner from preventing any kind of “revenue cliff”.
With Marathon’s current production of 28-30 BTC per day, this could mean an additional 133 days of supply entering the market, in addition to the BTC they generate. Following the halving, their production would decrease to 14-15 BTC per day. “Other miners will likely follow a similar strategy to liquidate part of their inventory gradually,” said Thielen.
Bitcoin Miners Facing Prospect of $10 Billion Losses
Another report suggested that Bitcoin miners could face losses to the tune of $10 billion after the fourth Bitcoin halving event. The upcoming Bitcoin halving will reduce the daily reward for miners validating transactions from 900 to 450 BTC.
Considering Bitcoin’s present value, this adjustment could lead to a revenue drop of $10 billion annually to the Bitcoin mining industry. To offset this loss, top players like Marathon Digital and CleanSpark are investing in new equipment and acquiring smaller competitors. Speaking of the development, Matthew Kimmell. Some market players are also anticipating that following the Bitcoin halving event, stocks of BTC mining firms will also collapse.
Conclusion
As the fourth Bitcoin halving event approaches within a mere five days, the cryptocurrency market braces for potential repercussions, particularly regarding BTC miners preparing for a significant dump. According to Markus Thielen, head of research at 10x Research, miners could unleash a staggering $5 billion worth of Bitcoin onto the market post-halving, potentially extending market stagnation for four to six months, a trend observed following previous halvings. This anticipated dumping of Bitcoin poses a challenge, potentially leading to a prolonged period of sideways movement in Bitcoin’s price trajectory, dampening hopes of immediate post-halving surges.
On the flip side, miners are actively accumulating BTC reserves ahead of the halving, mirroring previous patterns of accumulation observed in recent months amidst Bitcoin’s price surge. Notably, Marathon Digital, one of the largest Bitcoin miners, is strategically stockpiling inventory to mitigate revenue risks post-halving. However, despite efforts to offset potential losses, reports suggest that the Bitcoin mining industry could face staggering losses of up to $10 billion annually post-halving, prompting industry players to explore avenues for adaptation and resilience in the face of impending challenges.
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