๐ฅ Bitcoin Miners UNPROFITABLE After The Halving ๐จ
As per Cantors Fitzgerald's analysis that came out a couple of days ago, most big Bitcoin mining companies are deemed to be unprofitable after the April 2024 halving.
Why is this important? Well, if the bigges miners in the world are mostly 'producing' at a loss, they can do either of two things:
(1) Sell their tokens at a loss to recoup immediate costs (in case they don't have a lot of money in the bank).
(2) Hold on to their tokens and wait for the bull-run, which should (historically) occur in late 2024 and 2025.
In case of (1), this can lead to further downwards pressure and potentially even a bearish cascade. Miners need to sell more and more of their BTC's to regain the same dollar value when prices are falling, which will function as a self-deteriorating mechanism.
Consequentially, this will be a great time for the average investor. Buy Bitcoin at discounted prices and let the market reward which miner is the most efficient.
In case of (2), we can expect more bullish pressure. Since miners are the top sellers in the world, reducing the Bitcoin supply will likely lead to higher prices (with constant demand. Like we saw during the bear market, some miners can also halt their operations until Bitcoin prices are higher.
Since most of these companies have never experienced a halving before, it's going to be interesting to see which ones have prepared the best and which ones haven't. I'd imagine the badly prepared miners to shut down operations, leading to both bearish and bullish volatility.
Interesting times ahead.
Why is this important? Well, if the bigges miners in the world are mostly 'producing' at a loss, they can do either of two things:
(1) Sell their tokens at a loss to recoup immediate costs (in case they don't have a lot of money in the bank).
(2) Hold on to their tokens and wait for the bull-run, which should (historically) occur in late 2024 and 2025.
In case of (1), this can lead to further downwards pressure and potentially even a bearish cascade. Miners need to sell more and more of their BTC's to regain the same dollar value when prices are falling, which will function as a self-deteriorating mechanism.
Consequentially, this will be a great time for the average investor. Buy Bitcoin at discounted prices and let the market reward which miner is the most efficient.
In case of (2), we can expect more bullish pressure. Since miners are the top sellers in the world, reducing the Bitcoin supply will likely lead to higher prices (with constant demand. Like we saw during the bear market, some miners can also halt their operations until Bitcoin prices are higher.
Since most of these companies have never experienced a halving before, it's going to be interesting to see which ones have prepared the best and which ones haven't. I'd imagine the badly prepared miners to shut down operations, leading to both bearish and bullish volatility.
Interesting times ahead.
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