Bitcoin Halving: Your Questions Answered
The Bitcoin halving is just days away and Will Foxley from the mining pod is joining me to answer some of your social media questions. Thank you, Will, for taking the time to do this podcast within a podcast. Let’s dive into these topics. First up, what are your thoughts on JP Morgan’s claim that the halving is already priced in? I believe it is to some extent. Historically, after Bitcoin halvings, we’ve seen a price increase about 6 to 9 months later. While it’s hard to pinpoint whether the halving directly causes this, the reduced supply of Bitcoin is likely to positively impact ETFs and buyers. With the halving schedule known well in advance, preparations have been made by many, so it’s safe to say it’s been factored into the market.
Moving on to the second question from our social media channels – will the hash rate decrease post-halving? It’s likely to see a slight decrease, maybe around 10%. Miners often mine aggressively leading up to the halving to maximize rewards, but afterwards, less efficient machines may be turned off until prices rise again. However, with Bitcoin’s current high price and bullish year expected, we may not see as significant of a drop in hash rate compared to past halvings.
Next, do you think this year’s halving will have a greater impact due to institutional interest in Bitcoin? Definitely. Compared to previous halvings, the increased attention from institutions trading Bitcoin makes this event more significant. With the rise of ETFs and institutional buying, the decrease in supply from miners will likely exert more price pressure, making this halving one of the most crucial moments in Bitcoin’s recent history.
Lastly, what happens when all the halvings have occurred? Ultimately, Bitcoin will rely on transaction fees for security once the block subsidy ends in 2140. While this may seem far off, it’s important for miners and stakeholders to focus on developing solutions to sustain Bitcoin’s security budget through transaction fees. Strategies such as layer two solutions and innovative applications on top of Bitcoin will be crucial in ensuring the sustainability of the network in the long run.
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