Bitcoin Post Halving, What Happens Now?
Bitcoin has completed its 3rd halving successfully and it is now trading above $9,000 again. Although we have seen a good amount of volatility pre-halving, the day of the event, Bitcoin remained stagnant and there were no major price moves.
A lot of analysts and traders were worried about a possible Miner Capitulation, an event that occurs when mining becomes unprofitable (this time because of the halving), and miners are forced to sell their Bitcoins creating a snowball effect.
However, it seems that Bitcoin is reacting quite well to the event and continues with its recent uptrend, eying up to $10,000 now.
How Are Miners Going to Survive?
Clearly, miners will have a harder time conducting a successful mining operation, they will need to adapt to new hardware or somehow cut the cost of their operations. Not everything is bad news for them as the recent Coronavirus pandemic is actually helping them.
Electricity cost in China has decreased significantly over the past few months and most of the Bitcoin mining operations are conducted there. It is also important to note that fiat currencies are especially weak right now which could also help miners cut their expenses around the world.
Either way, Satoshi Nakamoto created an ingenious algorithm capable of automatically adjusting the difficulty of Bitcoin mining to always incentivize new miners to join in if the older ones are exiting. Mining hardware is also still evolving and will allow miners to become even more efficient in the next 5–10 years.
Have you ever wondered what happens when all Bitcoins are mined? Well, miners will still validate transactions because they will still get rewarded with fees. As time goes by, Bitcoin should become one of the most used currencies in the world which would mean higher rewards per block for miners. Fees would be high enough to incentivize miners to continue their job.
If fees are not high enough, it means that Bitcoin is probably dead anyway and no one is using it so it’s a self-regulated process.
About Vertex
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Vertex.Market is a product of Vertex Capital (vertex-capital.io), a cryptocurrency asset management company with a focus on Middle Eastern clients, including Saudi Arabia, United Arab Emirates, Bahrain, and Kuwait.
