Bitcoin halving is a significant milestone event that occurs every 210,000 blocks, or approximately every four years. The halving event reduces the block rewards that miners receive by half.
In addition to indirectly affecting the price of Bitcoin (BTC), the halving event also has a significant impact on miner behavior, as it costs twice as much to mine to obtain the same amount of BTC.
According to data from CryptoQuant CEO Ki Young Ju, the current cost of mining with Antminer S19 XP rises from $40,000 to $80,000. The increase in BTC price after the halving will compensate for the increase in mining costs.
After the May 2020 halving, the price for miners to continue mining profitably exceeded $30,000, while BTC price also reached an all-time high of $69,000 during the same cycle. Rose.
As of April 6th, the average Bitcoin mining cost was $49,902, and at the time of writing, the BTC price was over $70,000. Since the April 20th halving, the average mining cost has exceeded $80,000, and the BTC price needs to trade above $80,000 for miners to continue operating profitably.
Historically, BTC price has jumped several times after a halving. After the halving in 2012, the price of Bitcoin increased by about 9,000% to $1,162.
After the halving in 2016, the price of Bitcoin increased by approximately 4,200% to $19,800, and after the halving in 2020, the price of Bitcoin increased by almost 683% to $69,000.
Related: Bitcoin halving must contend with “annual downturn” — Coinbase
Therefore, miners continue to make profits despite fears that they will go out of business with each halving. The halving event will also render some mining machines obsolete as they will no longer be able to compete with the high power demands of hashing.
Each halving results in a period in which the BTC price is below a profitable price for miners. This period is marred by uncertainty and increased sales of mining equipment, often driving many small and lone miners out of business.
However, as demand increases while market supply decreases, prices rise and are often higher than the average mining cost for miners.
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