A History of Bitcoin Halvings
Year 30 days before Day after
2012 $10.59 $12.45
2016 $577.07 $651.30
2020 $6852.50 $8800.73
2024 ? ?
The 2024 $BTC Halving: What to Expect
Bitcoin's upcoming halving, where the block reward drops to 3.125 bitcoins, is a major turning point. It will significantly impact miners, potentially making it harder to turn a profit and driving innovation in more efficient mining tech. Past halvings suggest a temporary adjustment period as miners adapt to the lower rewards. This could affect the network's overall processing power (hash rate) and security.
Traditionally, the hash rate dips after a halving as less profitable miners stop mining. However, it usually rebounds within weeks. This is because the halving strengthens Bitcoin's scarcity, potentially increasing its price and boosting profits for remaining miners. If, like in the past, the price increase outweighs the reward reduction, mining can stay profitable even with fewer coins per block. Miners who stay in the game benefit as others leave, increasing their market share. Additionally, the halving encourages miners to invest in more efficient equipment to stay competitive. So, the hash rate might see a temporary decline but eventually rise with increased efficiency in the long run.
This is why we previously recommended underweighting bitcoin miner investments in the six months before the halving. The market often anticipates the initial cost increase for miners, leading to a price drop. Miners often spend heavily during this period. After the halving, some miners might be forced to shut down, potentially causing a short-term decrease in the network's processing power.
