A ‘Stress Test’ for Bitcoin Miners (and What That Means)

TL;DR

• Late final week, JP Morgan launched a report in regards to the upcoming Bitcoin halving taking place in April 2024, calling it “a stress take a look at for Bitcoin miners.”

• To ensure that BTC miners to remain worthwhile, one in every of two issues must occur – both, the worth of every BTC must go up; or, the value to mine every BTC must go down (by means of cheaper sources of power, higher high quality mining rigs and so forth.).

• The report went on to say that improvements like Ordinals inscriptions on the Bitcoin community have been usually optimistic for the worth of BTC, however extra improvements might want to come (just like Vitalik’s predictions final week).

Full Story

Late final week, JP Morgan launched a report in regards to the upcoming Bitcoin halving taking place in April 2024.

They referred to as the BTC halving occasion “a stress take a look at for Bitcoin miners.”

This is what meaning and why:

Each ~4 years, the rewards for mining BTC scale back by – you guessed it – half.

As a result of there’s a mounted provide of 21M BTC ever created, the ‘Bitcoin halving cycle’ has traditionally marked the beginning of a bull run.

(Demand + shortage = individuals valuing it extra).

However, the important thing level in JP Morgan’s report is: there are actual, mounted prices in terms of truly mining BTC.

Electrical energy, {hardware} (i.g. mining rigs), and a few human labor, are all required to ensure that BTC miners to achieve success.

So to ensure that BTC miners to remain worthwhile, one in every of two issues must occur – if each can occur, even higher.

Both, the worth of every BTC must go up; or, the value to mine every BTC must go down (by means of cheaper sources of power, higher high quality mining rigs and so forth.).

The report went on to say that improvements like Ordinals inscriptions on the Bitcoin community have been usually optimistic for the worth of BTC, however extra improvements might want to come (just like Vitalik’s predictions final week).

The BTC halving cycle is a magical factor.

Constructing shortage right into a forex, programatically, is one thing that had by no means been achieved earlier than the invent of BTC.

(The truth is, the other was true, which has led to inflation through the years).

Let’s have a look at how the mining firms reply to the ‘stress take a look at’ early subsequent 12 months!