Bitcoin Halving Marks Its Fourth Successful Completion, CoinGecko Says

The Bitcoin network experienced a significant milestone on April 19, 2024, with the fourth halving of Bitcoin’s new block reward. according to To CoinGecko. This event is managed by pre-programmed code and reflects the fact that Bitcoin has a finite supply. The amount of newly created Bitcoin is steadily decreasing, raising the question: Will miners seize the golden opportunity or face ruthless exclusion from the market?

Due to the halving of Bitcoin, mining block rewards will be drastically reduced. This is an important event that affects operations. During the halving, miner payouts decreased from 6.25 Bitcoins to 3.125 Bitcoins (approximately $200,000). Although it cemented Bitcoin’s status as “digital gold,” the correction disrupted miners’ profitability. The halving will both emphasize Bitcoin’s scarcity and reshape the mining economy.

Analysts like Maxim’s Matthew Garinko believe the crypto mining sector will consolidate. Miners with affordable and reliable energy sources and efficient equipment are likely to endure. However, miners with inefficient setups or expensive power supplies may face closure due to operational issues.

Impact of Bitcoin halving on price, hashrate, and mining industry

JP Morgan and Deutsche Bank expect a temporary decline in Bitcoin prices after the halving event. However, Benchmark’s Mark Palmer believes that the introduction of a spot Bitcoin ETF could simultaneously create demand and amplify the impact on Bitcoin’s long-term price.

Historically, Bitcoin halvings have caused short-term declines in Bitcoin’s hashrate, or the total computing power used for mining. This occurs because mining becomes less profitable for some miners due to reduced rewards. But historically, every time hashrate is halved, it recovers within a few months.

Bitcoin’s hash rate continues to reach all-time highs. Miners will be in fierce competition before the halving event. This surprising hashrate trend could reduce typical miner outflows after the halving. Additionally, Bitcoin’s high price may motivate miners to continue despite diminishing rewards.

Bitcoin halving will be an important test for the mining industry. While that would strengthen Bitcoin’s scarcity narrative, it would also put tremendous pressure on miners. The coming months will reveal how effectively the industry can adapt to this new reality, and whether the “digital gold rush” continues for all participants.

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