The BTC Halving Cycle and What It Means for Miners

TL;DR

• Each ~4 years, BTC turns into twice as arduous to mine – and since there’s a fastened provide of 21M BTC ever created, the ‘Bitcoin halving cycle’ has traditionally marked the beginning of a bull run.

• Put up-halving, it would turn into twice as arduous to mine the identical quantity of BTC; so mining prices are anticipated to roughly double, making the breakeven level someplace between $20,000-$30,000.

• The excellent news is: the BTC halving cycle does make BTC extra scarce. So so long as demand stays the identical, the worth of BTC ought to theoretically go up.

Full Story

Each coupla weeks we write a chunk on the Bitcoin halving occasion that is as a consequence of happen in April 2024.

Why? Trigger it is a hella vital mechanism to grasp on the subject of the worth of BTC (and by affiliation, all crypto valuations).

To recap (and quote ourselves):

“Each ~4 years, BTC turns into twice as arduous to mine – and since there’s a fastened provide of 21M BTC ever created, the ‘Bitcoin halving cycle’ has traditionally marked the beginning of a bull run.

(Demand + shortage = folks valuing it extra).”

However here is the factor.

In the present day, primarily based on publicly out there knowledge (from publicly listed miners), every Bitcoin prices $10,000-$15,000 to mine.

On the present worth of simply over $26k, that is all effective and dandy. Actually, miners could make a neat revenue.

However, post-halving, it would turn into twice as arduous to mine the identical quantity of BTC; so mining prices are anticipated to roughly double, making the breakeven level someplace between $20,000-$30,000.

The dangerous information is: if the worth of BTC isn’t above $30,000, assuming no further efficiencies are made (higher chips, cheaper energy and many others.), mining operations might begin working at a gross loss.

The excellent news is: the BTC halving cycle does make BTC extra scarce. So so long as demand stays the identical, the worth of BTC ought to theoretically go up.

We do not have a crystal ball, and this positive ain’t monetary recommendation.

However hey, positive is a enjoyable idea to elucidate to your drunk uncle subsequent household gathering.