There has always been a view in the market that the game of miners will cause a sharp drop in BTC before and after the halving, because lowering the price of the currency will help speed up the clearance of old mining machines and reduce the hash rate. Today, let’s take a look at the relationship between the price of the currency and the hash rate in the past two halvings.

The first halving was during the GPU mining era. On July 10, 2016, BTC halved for the second time. At that time, Antminer S9 and Avalon A7 were considered top-level machines with a hashrate of around 13T. There was only a small fluctuation on the day of the second halving, but a wave of decline began more than half a month after the halving.

The hash rate also dropped from 1659PH/S to 1262PH/S, but the hash rate was only a short-term fluctuation and was restored in less than a month. With the increase in the output of new machines, the price of the currency continued to fluctuate for half a year before the bull market began.

On May 11, 2020, BTC halved for the third time. The overall price of the coin in 20 years was still more affected by the macro environment. The impact of the global epidemic was the main reason for the sharp drop in the price of the coin at that time, but from a small cycle perspective, there was indeed a small pit around May 11, and the hash rate also dropped from 136 to 94 EH/S.

At that time, the popular mainstream mining machines on the market had a computing power of about 100T, such as Ant S19. The previous generation of flagship machines represented by S9 are facing shutdown. From the historical data, the recovery period of the coin price and hash rate after the halving in 2020 is about two months, and the lowest coin price reached more than 8,000. Calculated based on the difficulty at that time, even with the cheapest electricity fee during the flood season, the shutdown coin price of S19 reached about 5,000.

At least judging from the data of the first two halvings, the impact of halving on hash rate has been increasing year by year. After the halving, the price of coins has indeed fallen, but a normal correction after all the positive factors have been exhausted cannot be ruled out.

So what will happen with this year’s third halving?

Based on the electricity fee of $0.07, the mainstream mining machines with a computing power of about 100T in the last cycle are already hovering on the shutdown line even if the current price is maintained. If the price of the currency drops to 60,000, a large number of mining machines will be shut down. For newer mining machines, the safety line is basically around 40,000.

The BTC ecosystem is so hot now. Although the additional block rewards make miners earn a lot of money, this part of the income is unstable. Mining farms are generally unwilling to shut down and restart machines frequently. One reason is the contract problem, and the other is the large loss of machines. Therefore, this part of the income is still difficult to save the mining machines that are facing shutdown after the halving.

Therefore, it is inevitable that a large number of old mining machines will be cleared or transferred. From this perspective, the miners do have some motivation to lower the price of the currency to reduce the hash rate, but with the current increase in mining difficulty, with the accelerated shipment of new mining machines, the price of the currency does not need to fall too much to eliminate many old mining machines, and the overall computing power of old mining machines is not as high as that of new mining machines.

The price of the currency will fluctuate after the halving, and it will last for a while. If it can reach 50,000-60,000, it will be a good bargain hunting position. However, BTC with more than 40,000 will most likely only be seen by inserting a pin, and those with more than 30,000 will not be seen.