#Bitcoin miners' lower income after halving will be reinforced by Ordinals rates
About two months from now, in mid-April 2024, Bitcoin will undergo a massive change, halving its reward for miners who successfully complete a block. Known as "#Halving " or "the halvening," the event is often considered bullish for Bitcoin, as several halvings in the past have been followed by sustained increases in the price of #BTC .
However, Grayscale analysts warn, there are ways to explain those price increases outside of simple stock and flow analysis. After all, "other cryptocurrencies with similar halving mechanisms, such as #Litecoin
[have not experienced systematic price appreciation following the halving. "This suggests that while scarcity sometimes influences price, other factors also play a role," the analysts wrote, citing broader macroeconomic conditions as a factor.
Miners seek income from #ordinals
In their report, the analysts warn that a price increase is not guaranteed after a halving event. However, it will pose a challenge for Bitcoin miners, since most of their revenue comes from block rewards. With a decline in block rewards coupled with the rising mining difficulty of the Bitcoin network, which hit an all-time high last year, miners may find themselves in a "tense position."
Miners have prepared for the upcoming shift by selling coins and raising capital in the final quarter of 2023 to generate liquidity, including a planned $750 million capital raise by miner Marathon Digital, the report explains.
The silver lining for miners: Transaction fees related to Ordinals activity on the Bitcoin chain have presented a significant revenue opportunity for miners.
$BTC $LTC
About two months from now, in mid-April 2024, Bitcoin will undergo a massive change, halving its reward for miners who successfully complete a block. Known as "#Halving " or "the halvening," the event is often considered bullish for Bitcoin, as several halvings in the past have been followed by sustained increases in the price of #BTC .
However, Grayscale analysts warn, there are ways to explain those price increases outside of simple stock and flow analysis. After all, "other cryptocurrencies with similar halving mechanisms, such as #Litecoin
[have not experienced systematic price appreciation following the halving. "This suggests that while scarcity sometimes influences price, other factors also play a role," the analysts wrote, citing broader macroeconomic conditions as a factor.
Miners seek income from #ordinals
In their report, the analysts warn that a price increase is not guaranteed after a halving event. However, it will pose a challenge for Bitcoin miners, since most of their revenue comes from block rewards. With a decline in block rewards coupled with the rising mining difficulty of the Bitcoin network, which hit an all-time high last year, miners may find themselves in a "tense position."
Miners have prepared for the upcoming shift by selling coins and raising capital in the final quarter of 2023 to generate liquidity, including a planned $750 million capital raise by miner Marathon Digital, the report explains.
The silver lining for miners: Transaction fees related to Ordinals activity on the Bitcoin chain have presented a significant revenue opportunity for miners.
$BTC $LTC