Miners Need to Fully Understand Bitcoin Halving

What is Bitcoin Halving?

The halving of Bitcoin is a pivotal event in the cryptocurrency world. It’s a fixed anti-inflation mechanism designed by Bitcoin’s creator, Satoshi Nakamoto, that halves the number of bitcoins awarded to miners every 210,000 blocks. In 2009, when miners first started mining Bitcoin, the reward for mining one block was 50 bitcoins. After several halvings, the current reward per block mined is 6.25 bitcoins. The next halving is expected in 2024, with the reward reducing to 3.125 bitcoins.

The Impact of Bitcoin Halving on Miners

So, does Bitcoin halving increase or decrease miners’ profits?

As we know, a miner’s income is determined by a complex set of factors, with the price of Bitcoin being the most significant. Historically, during periods of low Bitcoin prices, the value generated by mining machines couldn’t even cover the electricity costs incurred. Conversely, when Bitcoin prices soared, it was a bountiful season for miners. Historical data shows that within 18 months of a Bitcoin halving, the price of Bitcoin tends to “coincidentally” skyrocket. This phenomenon is primarily attributed to the supply failing to keep up with demand after halving, thus elevating prices.

However, BITMARS believes that this historical pattern is not an iron law. The price of Bitcoin is determined by numerous factors, including but not limited to the global economic situation, market sentiment, investment psychology, and regulatory policies. To illustrate this, at the beginning of 2024, the influx of funds into the Bitcoin ETF in the United States resulted in a bull market earlier and more intensely than in previous halving periods, surprising many investors.

Therefore, in response to market fluctuations caused by halving, miners should conduct thorough research on market behaviors and trends, evaluate their risk tolerance, and avoid blindly believing in the ‘halving myth’ or arbitrarily choose mining machines to increase capacity. If increasing mining capacity is considered, it is advisable to opt for more resilient mining machines. We recommend the Antminer S21 200T and Antminer T21 190T, with energy efficiency ratios of 17.5J/T and 19J/T, respectively. This means that they can generate positive returns regardless of whether the price of Bitcoin significantly rises or falls in the coming years.

The above information about Bitcoin halving is compiled by BITMARS for our miner friends. BITMARS is an internationally renowned cryptocurrency mining machine trading company serving globally. We provide comprehensive, professional, timely, and cost-effective mining machine purchasing and hosting services to maximize your profits.