4th Coming: Bitcoin's Halving - Doubling Costs, Doubling Excitement!

Ticker Symbols:-

Bitcoin (BTC) - $63 971.00 , Marathon Digital Holdings Inc (MARA) - $16.50, CleanSpark Inc (CLSK) - $17.20, Riot Platforms (RIOT) - $9.13 , Phoenix Group Holdings PLC (PHNX) - $5.98, Terawulf Inc (WULF) - $2.29,


A Bitcoin (BTC) halving event has so far taken place roughly every 4 years when the mining rewards are halved and in turn, halves the supply rate of new BTC. The current market cap of BTC is sitting at about $1.2 Trillion and with the current supply sitting at about 19 million BTC in circulation, it’s meant to only have 21 million in circulation with the likely last block being mined around the year 2140.

What Does This All Mean?

The current BTC price is already sitting at all time highs that had not been seen since 4th quarter 2021. The rally has been attributed to a number of things but, one major reason for the moon shot performance, has been anticipation of the SEC's approval of the spot ETFs. This would have meant that investors are able to dabble in crypto in a less riskier way than ever before, and this has attracted a huge influx of cash this year, experts said. But since then, the halving has been handed over the baton stick of momentum which is projected to create a rally, pushing the price to new highs, at least that is the expectation of every BTC trader that has strapped themselves to the BTC rocket.

Ready For Takeoff Or Are We...

Institutional miners are either folding or consolidating on the expected cost of mining BTC projected to almost double after the halving. With the current cost for mining a single BTC, averaging between $11 000 - $15 000, it is scheduled to jump, ranging from $35 000 - $40 000. The CEO of Riot Platforms (RIOT) Jason Les, has recently been interviewed by Bloomberg stating that they are well positioned with the incoming halving. He mentioned lower operations costs, at least from his end because we have already established that the cost of mining BTC is likely to double post the halving event, he also mentioned better equipment as they are increasing capacity and more demand for the crypto currency, are all set to push the price up.

Potential Hiccups or Opportunities Anyone

RIOT, CLSK and MARA, all saw drops in their share prices for consecutive days with the recent escalations in the Iran - Israel conflict that has seen investors feeling a tad bit bearish about riskier investments. This is not all there is, the Valkyrie Bitcoin Miners exchange-traded fund has dropped 28% this month and this has to be taken note of. Most of the publicly traded BTC mining companies are probably going to ride the wave of the down trend as they have resources to stave off any negative price action for a longer period of time compared to their private counterparts. Bernstein reports that consolidation will be the order of the day after the halving as the major players can scoop up struggling BTC mining companies that are either no longer competitive or financially struggling. Talk about Darwinism on steroids!

MARA is already sitting on a pile of cash, $800 million strong, consisting of BTC and cash that it plans to use to acquire ‘strategic opportunities’ post the halving. CLSK has been acquiring some cheaper assets with the bear market that recently gripped most mining firms by the jugular and even has an additional stash of $170 million waiting to pounce on more assets post the halving. And, RIOT just spent $290.5 million on new machines to stay even more competitive.

Personal Take

This halving is proving to be another tale that is meant to show who the real ‘mafioso’ are. With most of the major players planning on a ‘survive or die’ strategy, the landscape is shifting right in front of our eyes. Would I go long on the institutional miners or BTC? Now, wouldn’t you like to know...

Posted in Crypto on Apr 25, 2024