Will BTC Miners Affect BTC Prices After The 2020 Halving Event?

Data & Research / 12.05.2020

The countdown to the much anticipated May Bitcoin halving event is finally over, and all key players are expecting this event to go down in their favor.

Bitcoin miners are perhaps the most affected by this third halving. They had to invest more in equipment, will have to work more complex mathematics, and above all, earn 50% of what they received four years ago.

The other groups anticipating this event are both seasonal investors who are in it for the hype and seasoned bitcoin investors, some of whom are confident it’s the beginning of the Bitcoin grand rising.

In recent weeks, Bitcoin prices rallied up as more people were buying to hold, confident that prices will keep rising and rising. But since this year’s halving is the first time it is occurring amidst a global recession, it has brought about a lot of uncertainties in the crypto markets.

What Will Bitcoin Miners Do after Bitcoin’s halving?

Bitcoin is doing the exact opposite of what governments are doing in a time of recession. The current global crisis has governments everywhere carrying out massive quantitative easing, which will eventually result in even higher inflation.

Meanwhile, Bitcoin’s scarcity will increase by 50% as an asset that already has a limited supply, unlike fiat, which central banks can keep printing at will.

BTC miners will earn rewards depending on how fast they can perform on the network, and that means they will have to rely mostly on the computing power of their mining rigs. Many old miners have already been phased out, while others were only able to come back when BCT prices started rallying in April.

For most miners, this might probably be the last BTC halving they may decide to participate in, and such a fact might turn them into long term ‘hodlers.’ Miners may move to other minable coins, which will give their mining rigs more rewards for less hash power.

Alternatively, mining might become more industrial than individual, as organizations like rig manufacturers and professional mining pools might have more resources to keep up with the extreme BTC mining demands.

Bitcoin Investors

There is a lot of speculation right now, but BTC prices might not move as many flash investors are anticipating. The high volatility of BTC prices right now makes BTC price movement in either direction a possible reality.

Institutional BTC investors might also see a rise in profits as people lean more towards lending than dumping their BTC.

The scarcity of an asset is always a great price stabilizer, but there are other factors to consider. For instance, some of the migrants to BTC from traditional markets might decide to go back once the global economy starts to stabilize once again.

BTC’s Post-Halving Liquidity

BTC liquidity will also influence prices because people (hodlers) might choke circulation by avoiding even simple BTC transactions.

Additionally, big fish BCT investors, also known as “crypto whales,” might also play a key role. They have been known in the past to buy in bulk to stimulate demand or dump in bulk to simulate supply.

It’s, therefore, possible that they might try to dupe the market through price manipulation and affect both short term and long term BTC prices after the halving.

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A creative writer in the field of content writing for the past 7 years. Iulian is passionate about his work and his interest in areas such as technology, travel, sports, literature and gastronomy have aided him to the research quality in articles that reflect these themes. Recently, he discovered the Bitcoin and the blockchain technology and he’s a big fan now.