Researcher Predicts Miners Will Sell $5 Billion Worth of Bitcoin After Halving
Researcher Predicts Miners Will Sell $5 Billion Worth of Bitcoin After Halving
The Bitcoin halving is projected to occur on April 20, 2024. Ahead of this event, the head of research at 10x Research, Markus Thielen, revealed that there is a possibility that Bitcoin miners will sell $5 billion worth of Bitcoin into the market. However, this sale will not happen all at once but will be spread over a period of four to six months.
"The sales could take place over four to six months, explaining why Bitcoin may move sideways in the coming months – as it did after the previous halving," he said.
Looking back at the history of the 2020 halving, there is a possibility that the price of Bitcoin will not experience significant price movements until four to six months after the halving.
Thielen also argues that altcoins, in particular, may bear the brunt of this situation. Many of them have experienced significant declines over the past week and are still far from their peak in 2021.
"Even if there is a correlation between halving and altcoin rallies, as some suggest, historical evidence shows that rallies typically begin almost six months later," he said.
Meanwhile, the price of Bitcoin as of April 15, 2024, is trading at $64,800, down 11% from its peak price of $73,750 on March 13, 2024.
Mining Companies to Sell Inventory
In his report, Thielen also highlighted the world's largest Bitcoin miner, Marathon Digital, which has built up inventory, which is likely to be sold gradually to prevent a revenue decline, given that mining rewards will be halved.
Marathon is known to be able to produce 28-30 BTC per day, which could generate an additional 133 days of supply entering the market plus the BTC they produce, which will be 14-15 BTC per day after halving.
Thielen concluded that if all miners have a similar strategy to sell inventory post-halving, "this could result in maximum BTC sales of $104 million per day – reversing the supply/demand imbalance that caused BTC to strengthen before halving."
Last week, as reported by Cointelegraph, Marathon CEO Peter Thiel said that the company's breakeven point would be around $46,000 per BTC to maintain their profits after halving.
Conclusion
as the Bitcoin halving approaches on April 20, 2024, researchers like Markus Thielen from 10x Research are anticipating significant movements in the market.
Thielen's prediction of Bitcoin miners potentially selling $5 billion worth of Bitcoin over the next four to six months suggests a cautious outlook for the cryptocurrency.
With historical data indicating that significant price movements may not occur until several months after the halving, investors should brace themselves for a period of sideways movement. Additionally, Thielen's observation regarding the potential impact on altcoins highlights the interconnectedness of various cryptocurrencies within the market ecosystem.
The focus on mining companies, such as Marathon Digital, further underscores the strategic considerations facing industry players in adjusting to the halving's effects on their revenue streams. As Marathon CEO Peter Thiel acknowledges the breakeven point for his company post-halving, it becomes evident that market participants are actively adapting their strategies to navigate this period of change.
Ultimately, Thielen's insights shed light on the complex dynamics at play in the cryptocurrency market, emphasizing the importance of careful analysis and strategic planning for investors and industry stakeholders alike.
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*Disclaimer:
This content aims to enrich reader information. Always conduct independent research and use disposable income before investing. All buying, selling, and crypto asset investment activities are the reader's responsibility.
