Big day for Bitcoin miners: The halving is starting! With the #Bitcoin halving, which will take place between April 18-20, the electricity costs spent by Bitcoin miners to produce coins will roughly double and the rewards they receive will be halved. This could hurt miners' profitability at first. But historically, miners' profits have tended to rise in the months after each halving (as the Bitcoin price increases). Price declines during the halving may offer opportunities to investors. Capriole Investments Bitcoin Production Cost Indicator also explains this. The dark green line at the bottom estimates the average electricity cost for mining a single bitcoin, while the purple line in the middle represents the total cost (electricity plus operating costs). The light green line shows how much miners sold their coins for. So the further above the green line is the middle line, the more profit miners make on average. Now, the largest gaps between the light green and purple lines started nine months after the 2016 halving (first rectangle) and six months after the 2020 halving (second rectangle). This is mostly because the price of Bitcoin rises after each halving (and stays higher for a while). We should also point out that this year's event has a special importance compared to previous halvings. This year, the U.S. Securities and Exchange Commission's approval of 11 Bitcoin ETF applications positioned Bitcoin for a wider sea of investors, causing the cryptocurrency to set a new record ahead of the halving cycle. Moreover, these developments led to a highly optimistic change in target prices for Bitcoin. For example, Standard Chartered raised its year-end price forecast from $100,000 to $150,000, “given the rapid transition from ETF inflows to the Bitcoin price.” #Bitcoin #Binance #btc
cc: Midas
