About two months from now, in mid-April 2024, Bitcoin BTC
+0.24%
A huge change will occur as the rewards for miners who successfully complete a block will be halved. Known as a “halving” or “halving,” this event is often considered bullish for Bitcoin, as the price of Bitcoin has continued to rise following several halvings in the past.
But Grayscale analysts warn that there are ways to explain these price increases beyond simple inventory and flow analysis. After all, “other cryptocurrencies with similar halving mechanisms, such as Litecoin… have not seen consistent price increases following halvings, meaning that while scarcity sometimes affects prices, other factors also play a role.” the analysts wrote. , citing the broader macroeconomic situation as a factor.
Miners Expect Ordinals Profits
Analysts warn in their report that price increases after the halving are not guaranteed. However, this will be a challenge for Bitcoin miners as most of their revenue comes from block rewards. The increase in mining difficulty on the Bitcoin network, which hit an all-time high last year, coupled with the decline in block rewards could put miners in a ‘nervous position’.
The report explains that miners have prepared for the coming change by selling coins to build liquidity and raising capital in the fourth quarter of 2023. This also includes miner Marathon Digital’s planned $750 million capital raising.
Hope for Miners: Transaction fees associated with Ordinals activity on the Bitcoin chain have presented significant revenue opportunities for miners. To date, more than $200 million has been paid to miners in ordinal-related transaction fees, and miners currently earn around 20% of their revenue from ordinal-related transactions.
“Miners want more revenue, and Ordinals has brought a renaissance to Bitcoin due to the massive demand for block space,” Bob Bodily, co-founder and CEO of Ordinals marketplace Bioniq, told The Block in December. said.
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