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At the end of July 2023, the Bitcoin network passed its 800,000th block.
While this marks a major milestone in the blockchain’s history, it also reminds us that only eight months are left until the next BTC halving event, which is set to take place on April 26, 2024.
On the one hand, acting as a potential catalyst for future bull runs, they bring good news for investors.
But the next halving’s impact on the mining industry is a more complex matter, seeing as how miners will need to adjust their strategies to make up for the reduced rewards that the halving will bring.
In this article, I would like to explore what some of these strategies can be.
A historical bull run catalyst
Occurring roughly every four years, Bitcoin halving is a deflationary mechanism that reduces the new coin supply by 50%.
In April 2024, the next event will decrease the block rewards amount from the current 6.25 BTC to 3.13 BTC.
Based on historical data, I believe it is very likely that the halving event will be followed by a major bull run taking place around late 2024-early 2025.
Reducing Bitcoin’s inflation rate to half generally comes with positive supply and demand dynamics, driving the cryptocurrency’s price to new highs.
After the last halving, the Bitcoin price increased from $8,970 on May 11, 2020, to $56,670 on May 11, 2021, representing a 533% ROI.
Considering the decreased inflation rate and surging demand, I expect April 26’s upcoming halving to push the BTC price up significantly.
As I see it, it is safe to assume that Bitcoin will reach the key psychological level of $100,000 in 2025.
Halving’s impact on miners’ behavioral patternsdapting to the new normal
Crypto mining involves a healthy competition for block rewards, as miners compete to mine a limited amount of BTC in each block.
This is due to Bitcoin’s block timethe time it takes for miners to produce a new block being set at around 10 minutes on average on the protocol level.
No matter if the network’s hash rate is only one kH/s or increases massively to 200 million TH/s, the same amount of block rewards will be distributed among miners.
This competition incentivizes miners to become both energy- and hardware-efficient.
By reducing block rewards to half, each halving significantly accelerates the progress of this…