The Bitcoin (BTC) community is facing a significant moment: the halving. This event, which only takes place every four years, halves the reward for mining new Bitcoins. This upcoming halving, which will take place in April, promises to trigger a real battle among miners.
Good news! 🎉 Bitvavo is celebrating Christmas and giving our readers free BTC, XRP or another cryptocurrency 🚀
Preparing for the halving
The larger mining companies are already preparing for this disruptive event, for example by purchasing new and more efficient mining equipment. For example, Marathon Digital (MARA), the largest publicly traded miner by hash rate, has more than $800 million in cash and Bitcoin and plans to use this capital to pursue strategic opportunities. Meanwhile, Hut 8, another big player, recently completed a merger with US Bitcoin, and Riot Platforms has ordered 66,560 new mining machines to stay ahead of the competition.
These preparations are clearly a response to the halving, an event that not only halves the number of new Bitcoins that can be mined, but also increases the value and rarity of Bitcoin. This dynamic has historically led to an exponential increase in the price of Bitcoin, which was attractive to investors but challenging for miners. During the previous BTC halving in 2020, the price of Bitcoin rose from around $8,500 to almost $18,000, while the reward for successfully mining a block fell from 12.50 BTC to 6.25 BTC.
Therefore, the current situation in the mining industry is tense. Many miners are already looking for ways to survive in anticipation of the next bull market.
“Survival of the Fittest” for BTC miners
These developments illustrate a kind of “law of nature” within the Bitcoin mining industry whereby the strongest can consume the weak. It is a time when strategic planning and growth are crucial. Smaller miners have to compete against large companies with deep pockets.
So the upcoming halving promises not only a technical change in the way new Bitcoins are created, but also a fundamental change in the structure of the Bitcoin mining industry. As a reward for Bitcoin mining halving, the battle for survival and growth in this competitive market will only intensify.
Post views: 0