Key Points
- Despite a decline in revenue, Bitcoin miners are retaining their crypto assets instead of selling.
- The recent halving event, which reduced fixed block rewards, has not led to miner capitulation.
Bitcoin miners are choosing to keep their cryptocurrency assets, even though their earnings have fallen to levels not seen since early 2023. This is due to the recent halving event, which cut the fixed block rewards from 6.25 BTC to 3.125 BTC. Despite this, miners are not selling their holdings at the current market prices.
Miner’s Response to Halving
CryptoQuant CEO Ki Young Ju stated in a post on April 30 that miners are faced with two choices: surrender or wait for a price increase in Bitcoin, which is currently trading at approximately $63,000. He added that there are no indications of surrender at this time.
Impact on Bitcoin’s Network
Researchers at Coinbase Research noted that the release of Runes on Bitcoin, an alternative to the BRC-20 protocol, resulted in a record $81 million in transaction fees in a single day following the halving. They suggest that the increase in variable transaction fees, coupled with the BTC rally during Q1, could sustain the network’s hash rate growth for a while. This implies that miners might find it profitable to continue Bitcoin mining at current prices.
The fourth halving of Bitcoin took place on April 20, following the mining of the 840,000th block. The network is designed to undergo halving every 210,000 blocks, reducing the block reward by half each time. This event is considered significant by the cryptocurrency community as it impacts the supply of new Bitcoins entering circulation.
Historically, Bitcoin’s price has seen substantial fluctuations around halving events. Some investors expected a price increase due to the recent reduction in supply. However, the latest upgrade occurred in a different context, as Bitcoin reached a new all-time high even before the halving took place. This has led to discussions about the changing landscape compared to previous cycles.
