Impending Bitcoin Halving May Trigger Major Hashrate Decline, Say Experts

  • Sergey Maga
  • 28 July, 2023 05:36
Impending Bitcoin Halving May Trigger Major Hashrate Decline, Say Experts

Experts predict that the Bitcoin network hashrate may drop by up to 30% following the next halving, due in April 2024. The prediction comes from Lucas Pipes of B. Riley Financial and Colin Harper of Luxor Mining, according to cryptonomist.

This halving will cut the Bitcoin block reward from 6.25 BTC to 3.125 BTC. Such a decrease could make mining operations less profitable, leading to a significant decline in the network’s hashrate.

Historically, similar drops have occurred after each halving. For instance, the hashrate fell by about 40% in the six days following the May 2020 halving.

However, these drops have not had long-lasting negative impacts. After the initial dip in 2020, the network’s hashrate recovered within weeks. Currently, Bitcoin’s network computing power sits at 385 EH/S, nearly triple its value in May 2020.

Even though halvings decrease miners’ rewards, they have often led to Bitcoin’s price surge. Fewer coins mined means less inflation, leading to less market selling pressure and higher asset appreciation.

Previous halvings in 2012, 2016, and 2020 resulted in significant price increases and hashrate growth. For instance, after the 2012 halving, Bitcoin’s price rose from $12.30 to $1,000, and the hashrate grew about 300 times.

As the next halving approaches, mining companies are gearing up. They’re investing in next-gen hardware for better performance and lower energy costs. As history suggests, their survival will depend on efficient energy use, reduced operating costs, and a BTC price surge.

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