Key Points
- Bitcoin miners may sell off approximately $5 billion worth of Bitcoin after the 2024 halving event.
- Miners could face losses of nearly $10 billion following the fourth Bitcoin halving.
As the fourth Bitcoin halving approaches in just five days, there are speculations that Bitcoin miners might be gearing up for a significant sell-off.
Markus Thielen, the head of research at 10x Research, suggests that miners could potentially offload a whopping $5 billion worth of Bitcoin post the halving event in 2024.
Post-Halving Market Dynamics
Thielen also indicated that the aftermath of this sell-off could linger for four to six months, which might explain why Bitcoin’s price could stagnate for a while, as it has done after previous halving events.
He anticipates a similar scenario this time around, with the crypto markets potentially facing a significant challenge during a six-month ‘summer’ lull.
Consequently, despite the Bitcoin halving 2024 scheduled for April 20, we might not witness any upward potential in the Bitcoin price until October.
Miner Accumulation and Strategy
Meanwhile, miners have been amassing their Bitcoin supplies ahead of the halving.
This pattern is reminiscent of past events, with strong miner accumulation observed in recent months as Bitcoin’s price surged 74% this year to reach a record high of $73,734.
Thielen’s research report indicates that Marathon Digital, the world’s largest Bitcoin miner, has built a substantial inventory to sell post-halving, thereby avoiding any potential ‘revenue cliff’.
With Marathon’s current production rate of 28-30 Bitcoin per day, this could result in an additional 133 days of supply entering the market, on top of the Bitcoin they generate.
Post-halving, their production would drop to 14-15 Bitcoin per day.
Thielen suggests that other miners are likely to adopt a similar strategy, gradually liquidating part of their inventory.
Potential Losses for Bitcoin Miners
Another report suggests that Bitcoin miners could incur losses of around $10 billion after the fourth Bitcoin halving.
The upcoming halving will slash the daily reward for miners validating transactions from 900 to 450 Bitcoin.
Given Bitcoin’s current value, this adjustment could result in a $10 billion annual revenue drop for the Bitcoin mining industry.
To counteract this loss, leading players like Marathon Digital and CleanSpark are investing in new equipment and acquiring smaller competitors.
Matthew Kimmell, a digital asset analyst at CoinShares, commented on the situation, stating, “This is the final push for miners to squeeze out as much revenue as they can before their production takes a big hit.
With revenues across the board decreasing overnight, the strategic response of each miner, and how they adapt, could well determine who comes out ahead and who gets left behind.”
Some market participants also expect that stocks of Bitcoin mining companies will plummet following the Bitcoin halving event.
