With the Bitcoin halving mere days away many eyes on how the miners will take it, and what the event will do to the price. But, there is evidence that the two sectors may be gearing up for the impact of this rather monumental event.
Miners already know what is coming. While the reward will be halved, the actual effect is the profitability margin which is often quite tight for Bitcoin miners, will also be sliced by 50 percent. This means that miners who operate at less than 50 percent profitability will suddenly lose money when the halving comes into effect.
However, the expectation appears to be from miners that they will be able to survive this, or even profit from it, by holding onto the Bitcoin they have mined in the run up to the halving. Data provided by ByteTree seems to suggest that as much as 1,067 Bitcoin has so far been held back off the market by miners this week.
The expectation is that the miners are holding onto the coin now as they believe its value is set to increase further when the halving takes place on the 12th of this month. Normally, miners hoarding most of the Bitcoin they mine without selling it to cover expenses is not optimistic.
Maybe not so bearish
In usual circumstances, seeing miners hoard their mined Bitcoin is more of a bearish sign, but according to ByteTree’s co-founder and chairman, Charlie Morris, it may well be more about the price that could rise after the halving and where miners can cash in to cover the spot-gap.
“We normally see this as bearish because it implies a soft bid in the market. With a recent price surge, clearly this hasn’t been the case, and so we can only assume that the miners also think higher prices are coming post-halving,” Morris said.
This is, of course, good for the general market as much of the predicting about the impact of Bitcoin;s halving has been for a market rally, and may are prepared for that. But, if it were not to happen, it could cause a bit of a backlash for investors.
Mines are prepared
For the mining community, this event has long been on the calendar and there has been more than enough time to prepare, but preparations alone may not have been good enough. However, it is expected that this halving will not be too disastrous for Bitcoin’s mining ecosystem as they have already faced some battles.
Bitcoin suffered a rather big price collapse that in may respect would have hit miners like a halving with regards to their profitability. This led to a capitulation of the mining efforts and even caused the difficulty to drop substantially.
But, new hardware and a sophisticated mining ecosystem meant there was more than enough power to keep the network strong and secure, and when this halving comes, most of the power would have already had a taster of a big loss in profits and will be ready.