Bitcoin Halving 2024: Impact on Mining Companies and Price Stability of Digital Currency

The Bitcoin halving was completed at dawn on Saturday, dealing a potential hit to companies’ revenues. Mining Although the price of the largest cryptocurrency has not been affected by a rise or fall so far.

Bitcoin mining is when computers solve complex puzzles to determine which miner gets the privilege of confirming the block and then gets the reward. The system requires massive computer processing power to manage and execute transactions. Halving means halving the reward for mining the most common digital currency, a process that happens every four years, meaning the next process will be in 2028.

This reward was set over the past four years at 6.25 bitcoins per new block, and was reduced today, Saturday, to 3,125 bitcoins, so the total new reward will reach about $210,000 according to the current price level. The next halving is expected to occur in 2028, and the reward will be reduced to 1.5625 from 3.125 for a miner who successfully processes a block of transaction data. The discrimination process will lead to a decline of about billions of dollars in the income of mining companies if the price of Bitcoin remains at the current level or if its price decreases, while the increase means compensation for that loss .

The change came into effect at 08:10 pm Friday New York time (00.10 am Saturday GMT). Traditionally, the halving process led to an increase in the price of Bitcoin, but according to certain websites reported by Bloomberg on Saturday, the price of the most famous and largest digital currency in the world has not changed much , because he is still going around the world. level of $64,000 after the half.

The latest halving process is the fourth since 2012, which, according to the anonymous founder of the currency, known as “Satoshi Nakamoto,” aims to protect the digital currency from inflation. “As expected, the halving was put in, so price movement was limited,” said Kok Kee Chung, CEO of Singapore-based AsiaNext, a digital asset exchange for institutional investors. He told Bloomberg: “Now the industry will have to wait and see if the increase happens in the coming weeks amid continued institutional interest. “

According to Edward Chen, co-founder of Parataxis Capital, “Bitcoin’s upside may decline in the short term due to macroeconomic factors, such as indications from the Federal Reserve that interest rate cuts are on hold and the conflict in the Middle East,” predicts. that “flows of investment funds will be greater… It will be the main cause of the price in the near future.”

Bitcoin mining is an energy-intensive process, as miners use special computers to verify the effectiveness of transactions on the blockchain. . JPMorgan expects the sector to consolidate, with publicly traded companies gaining market share through the stock exchange through buybacks or share price increases.

Bitcoin miners rely on mining rewards as their main source of income, as well as transaction fees, which represent a small percentage of income, and whose increase may increase some of help miners stay away as rewards continue to decrease.