Bitcoin Miners Gear Up for Profit Ahead of 2024 Halving

Published: November 14, 2023 at 3:06 am Updated: November 14, 2023 at 3:06 am

Edited and fact-checked:
November 14, 2023 at 3:06 am

In Brief

Bitcoin miners are ramping up efforts to maximize profits ahead of the 2024 halving event, expected to significantly impact mining rewards and efficiency.

With the recent rally in cryptocurrency, bitcoin miners are currently bouncing back from a sluggish phase. The aim now is to swiftly move to secure profits ahead of the anticipated “halving” in April 2024. The event, designed to reduce the token production rate, is significant for miners as the rewards for generating bitcoins are set to be halved.

The upcoming halving, integral to Bitcoin’s design to limit its total supply to 21 million (with 19 million already mined), will be a pivotal moment for the cryptocurrency and its stakeholders.

Miners Race to Capitalize on Bitcoin Rally

Halving occurs every 210,000 blocks and slashes the rate of new coin issuance by 50%. This process not only makes mining more challenging but also reduces the miners’ rewards, directly impacting the dynamics of Bitcoin mining.

Exchange-traded funds (ETFs) like the Invesco Alerian Galaxy Crypto Economy ETF (SATO), with substantial allocations to bitcoin miners, are also crucial in the halving discussion. The halving event prompts miners, including those within the SATO network, to retire older software — leading to increased efficiency in their operations.

The 2024 #Bitcoin halving is coming, estimated to be in April next year.

Past cycles have also seen an impressive 1yr return profile of 400%+ following the event.

In this edition, we study the supply dynamics and investor behaviour that underpins this.https://t.co/Obo9lIwoQl

— _Checkɱate (@_Checkmatey_) November 13, 2023

JPMorgan’s Forecast on the Bitcoin Fourth Halving

In a recent client note, JPMorgan has projected a 20% decline in the Bitcoin Network Hash Rate following the April 2024 halving. While newcomers to crypto realm might view this as unfavorable, the halving also serves to streamline the mining process.

The fourth halving is a key milestone, drawing attention for its potential impact on the market. While the exact timing is uncertain due to mining’s variable nature, on-chain analytics firm Glassnode estimates it could occur around April 23, 2024.

The halving event holds a certain allure for investors, given its historical tendency to boost market performance in the year following.

On-chain analyst “Checkmatey” from Glassnode notes that Bitcoin has historically shown an impressive annual return of over 400% post-halving. However, it’s important to remember that past performance is not indicative of future results.

This upcoming halving event underscores a critical phase in Bitcoin’s lifecycle, with miners and investors alike closely monitoring the potential changes and opportunities it may bring in the evolving landscape of cryptocurrency mining and investment.

Disclaimer

Any data, text, or other content on this page is provided as general market information and not as investment advice. Past performance is not necessarily an indicator of future results.

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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master’s degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti