The 2024 Bitcoin halving and the growing adoption of blockchain has renewed the hype for crypto assets among retail and institutional investors. Days before the predictable event, the crypto community has been engaging in an embroiled discussion concerning the impact of Bitcoin halving on the entire digital sector.
In a recent report, key industry players predicted that BTC would establish a sluggish momentum post the halving affecting the price of the world’s largest cryptocurrency. The decrease in BTC price might impact the share value of publicly listed Bitcoin miners in the US.
Impact of Bitcoin Halving
A statement from the chief mining strategist at Hashlabs, Jaran Mellerud, demonstrated that the aftermath of Bitcoin halving might force some crypto miners to exit the US market.
Mellerud predicts that Bitcoin’s halving will plunge stock value into a bloodbath where the investor will generate low profits. This implies that if Bitcoin price increases after the halving, then the price of public listed mining stock will steadily increase.
Occasionally, Bitcoin halving plays a significant role in the crypto sector, allowing the investors to maximize their profits. The Bitcoin halving process involved a comprehensive procedure to reduce block rewards, and reducing market supply of BTC.
Based on the advantages and disadvantages linked with the Bitcoin halving, Mellerud will closely monitor the market behavior three to four months after the halving. He plans to assess the profitability of the Bitcoin halving to the crypto investors.
According to the report, the Bitcoin halving is expected to occur on April 24, when the block reward will reduce from 6.25 BTC to around 3.125 BTC. The Bitcoin halving has been marked as a historical event that propelled the BTC price to establish a solid upward trajectory.
In the previous Bitcoin halving BTC established an upward trajectory. A review of the May 11, 2020, BTC was valued at $8750 before it increased by 430% in late October to break the $11,500 mark.
Significance of Bitcoin Halving to Crypto Miners
The surge in BTC post the 2020 halving created more opportunities in the crypto sector. However, if BTC fails to establish bullish momentum after the 2024 Bitcoin halving, then most crypto firms will be forced to cease their operations.
Mellurand expects that from July 2024, the price movement of BTC will determine whether some of the businesses will remain in operation. This implies that miners with hosting rates of $0.07 per kWh will be forced to close shop if Bitcoin fails to garner bullish steam.
He noted that most inefficient Bitcoin miners were in the United States. Besides analyzing the behavior of BTC after the halving, Mellerud envisions that most US-based miners will expand to Africa and Latin America to source cheap electricity for crypto mining.
The executive confessed that the discovering cheap energy sources in Ethiopia has attracted most firms to expand to North Eastern Africa. Mellerud confirmed that Hashlabs recently received multiple requests from US-based miners to support the expansion to Ethiopia.
Bitcoin Miners Seek to Optimize Crypto Mining
Compared to the hosting rate in the US, Mellerud observed that the rates in Ethiopia were lower by 30%. Mellerud’s projection about the impact of the upcoming Bitcoin halving on miners echoes an earlier report from renowned financial advisor Cantor Fitzgerald.
In his statement, Fitzgerald argued that if the price of BTC stagnates at $40,000 after the halving, the public listed miners may fail to generate the desired profits. Currently, BTC is hovering around the $51k mark. This positions the public-listed Bitcoin miners at a favorable point to blossom.
In an earlier interview, the head analyst at Blockware Solutions, Mitchell Askew, argued that public miners would seek to operate at a low electricity cost to remain profitable. The analyst noted that since the start of the bear market, Bitcoin miners have invested in acquiring new machinery to boost efficiency.
He remains optimistic that miners will not expand to the offshore markets despite the failure to generate profit in the US market. Based on his vast expertise in crypto mining activities, the executive noted that most miners have a fixed hosting contract, forcing them to continue operating in the US regardless of the profit realized from mining.
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