As the highly anticipated Bitcoin halving event in April 2024 draws near, some miners are increasing their sales of BTC, according to leading crypto analytics platform CryptoQuant. Daily sales to over-the-counter (OTC) desks peaked at 1,600 Bitcoin in late March, the highest level since Aug 2023.
This surge in sales activity is likely driven by miners aiming to maximize their profits before the halving event, which will cut their rewards in half. After the halving, miners will receive only 3.125 BTC per block, down from the current reward of 6.25 BTC.
Adding to the pressure on miner profitability is a notable decline in transaction fees as the halving nears. Despite daily revenues reaching new highs, the miner hashprice – a measure of miners’ earnings per unit of computational effort – remains 30% lower than pre-last halving levels, suggesting reduced overall earnings for miners.
Furthermore, the recent surge in the Bitcoin network’s hashrate to 600 H/s (hashes per second) indicates intensified competition among miners vying for the same block rewards. The hashrate reflects the total computational power dedicated to mining and securing the network, and as it increases, the network becomes more secure and resilient against potential attacks or disruptions.
The largest-ever Bitcoin halving event
The forthcoming halving in April this year is a critical event in the light of the BTC on-USD basis for miner rewards reduction. This mechanism may result in a 3-7% decline in active miners as a few miners could start operating unsustainably.
Nevertheless, introducing Bitcoin ETFs may absorb a portion of selling orders from miners and stabilize the overall demand for Bitcoin. ETFs provide institutional and retail investors with exposure to the price movements of Bitcoin without the asset itself, which could consequently add to the developing Bitcoin market structure.
The Bitcoin mining industry is preparing itself for the massive shifts that are to come as the halving draws near. Certain miners take aggressive initiatives, as do the big players, such as investment funds and other players who are speculating on the effects of the event on the supply-demand balance.
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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risk.
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