LIVEBitcoin Halving Could Mean Losses for Some Miners, Says Expert
Scheduled for April 19, 2024, this event will cut mining rewards from 6.25 BTC to 3.125 BTC per block. Charles Edwards, the founder of Capriole Investments, emphasizes immediate risks. Miners who have old, less efficient hardware might bear a great financial burden. This would result in some mining operations being shut down, with dire consequences for the overall network’s security and hash rate.
In particular, Edwards specifies the vulnerability of miners who used equipment from the past. As an example, the Bitmain Antminer S19 may continue to be a profitable miner only if the prices of Bitcoins will rise above $80,000. The current market situation, along with future uncertainties, intensifies their fears. Besides, the change may also result in the decentralization of mining activities, thus centralizing the power among a few larger operations that have money to spend on the latest technology.
The halving event is not just a technical adjustment; it has significant economic implications for the cryptocurrency market. Halving event is aimed at mitigating inflation and increasing the rarity of the asset by reducing the speed at which new bitcoins are produced. Such events have historically resulted in large price spikes. After the 2020 halving, the value of Bitcoin grew by almost 600% in 18 months. Nevertheless, the financial impact of the next halving is indeterminable, as the price of Bitcoins is currently going down.
Tether and Bitfinex CTO Paolo Ardoino provide a bullish statement regarding the halving process. He terms the incident as “poetic” and an enduring testimony of Bitcoin’s basic principles.
Ardoino explained that the halving acts like a “physics law,” meaning that it reinforces the predictable and systematic characteristics of Bitcoin’s supply mechanics. This viewpoint emphasizes the wider consequences of halving outside the direct economic impact, considering it essential to Bitcoin’s long-term value proposition.
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