While it’s plenty likely that the hype, at least, around the next Bitcoin “halvening” will drive the price upwards, it’s unclear if that will mean “moon” or not.
Bitmain’s Jihan Wu reportedly told Coindesk that he’s pessimistic on the subject.
“Maybe people speculate too much before the halving, and then you can’t sell the good news anymore. Maybe, this time a bullish cycle is not coming yet.”
Volatility Takes On New Meaning For Miners
Every crypto investor has to forever keep in mind that the next “dip” to buy is probably right around the corner.
Bitcoin difficulty is at crazy levels, and it currently requires some significant investment just to get started.
If you want to operate an independent mine, outside of a mining pool, you’d better be ready to plunk down some serious cash — maybe hundreds of thousands of dollars, depending on how serious you are, as a minimum.
As BSN reported earlier today, some companies are coming onto the scene with multi-million dollar backing.
Therefore, from that perspective, it’s not irrational to expect a certain conglomeration effect to begin to take hold.
Mining equipment is largely a centralized affair, no matter where it’s deployed. There’s essentially Bitmain and a few other small companies selling the goods.
Without a wider array of hardware, virtually the whole Bitcoin network, or a significant-enough percentage of it, is vulnerable to potential bugs introduced by one vendor.
What The Halvening Does Mean: Less Inflation
Whatever you think about the market prospects of the upcoming halvening, one thing it will do is reduce the dialy inflation of Bitcoin — by half.
In order for miners to continue making the same amount of money they were the day before, the price of BTC would have to roughly double.
As Wu says above, the price is likely to be propelled by speculation in the days leading up to the halvening.
The question is how much of that will carry over into the new reality — will there be enough demand from people not looking to sell the coins a bit higher not long later?
While coin traders may be relatively clean of anything involved with the mining industry, their livlihood largely counts on the efficiency and dedication of Bitcoin miners.
For example, if Bitcoin miners had once been willing to adopt a larger block size as a whole, there never would been a Bitcoin Cash hard fork.
This would have a cascade of effects. For example, if Craig Wright had later forked Bitcoin SV, he’d have done it away from Bitcoin Core, not Bitcoin Cash.
