30.10.2020

How Miners Expect the Crypto Markets to React

That’s Ciara Sun, head of global business and markets at cryptocurrency exchange Huobi. Speaking on the third podcast episode of “Bitcoin Halving 2020: Miner Perspectives,” Sun was joined by Bitfarms CFO John Rim. The two shared their insights on the expected market impacts of bitcoin’s third halving event.

“If price performance following the November 2012 and July 2016 halvings is any indicator, bitcoin’s price should increase significantly over the 10- to 12-month period following the [third] halving.”

Sun noted that many crypto investors are expecting a substantial bitcoin price increase in the months following the 50 percent reduction in bitcoin block subsidy rewards. However, Sun also caveated her statement saying the market dynamics leading up to May’s halving event are “more complicated” this time around due to global events such as the COVID-19 outbreak.

No matter the impact on bitcoin’s market price, Rim affirmed miner revenue per terahash would likely readjust and normalize to pre-halving levels as a result of mining difficulty adjustments. “The whole network relies on mining for the validation of transactions and for a self-incentivized system like bitcoin, you need miners to be profitable,” Rim said.

For more information about the bitcoin halving, download this free CoinDesk Research report, which features over 30 different charts and additional commentary from mining industry experts.

Bitcoin Halving 2020: How the World’s Largest Mining Pool Is Helping Miners ‘De-Risk’

“There have been days that F2Pool has lost 100 BTC in terms of having to pay miners without mining blocks themselves, but over a long period of time and with a significant amount of network hashrate those ups and downs even out,” said Thomas Heller, the mining pool’s global business director.

F2Pool is the largest bitcoin mining pool in the world, controlling 20% of the collective computational energy, also called hashrate, on the Bitcoin network. On the fifth and final episode of Bitcoin Halving 2020: Miner Perspectives, Heller discusses the economic incentives driving cryptocurrency mining and mining pool operations.

Though miner revenue has decreased sharply over the last two years from around $0.60 per terahash to $0.10, Heller explained that bitcoin mining continues to be profitable due to the release of more efficient hardware and the discovery of cheaper sources of electricity. Positive movement in bitcoin’s price is also a major factor, albeit a frustratingly unpredictable one.

Heller, who operates a slew of his own mining machines, said that without “significant price action” over the next two weeks leading up to Bitcoin’s mining reward reduction, also called the halving, both he and other miners would have no choice but to turn off “older machines.”

For more information about the halving event, download the free CoinDesk Research explainer report, which features over 30 different charts and additional commentary from bitcoin mining industry experts.

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