The Bitcoin halving came and went at approximately 7:00 PM UTC. The long-awaited, regularly scheduled event, which returns every four years, is expected to have long ago led miners to stop selling their BTC, which would suddenly be a loss.
However, initial data shows that miners are still dumping the exact same amount of BTC on the market. What does this mean for the very first cryptocurrency, and do these initial data suggest that the halving will not have the effect that crypto investors had long expected?
Understand the expected impact of the Bitcoin halving
Bitcoin was designed in the aftermath of the 2008 financial crisis by the mysterious Satoshi Nakamoto. They coded Bitcoin to have certain features that would add value in future recessions.
Only 21 million BTC will ever exist, giving the asset a scarcity comparable to gold. Adding a deflationary quality to the asset’s protocol reduces a recurring event, called halving, the block reward miners receive for securing the network.
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Before last night’s countdown reached zero, miners were given 12.5 BTC per validated block. Now that number is only 6.25 BTC.
But while the reward was reduced by 50%, the cost of validating each BTC block in energy remains the same.
This would lead to inefficient miners capitulating, clearing the market of miners that increase sales pressure, allowing more efficient miners to dominate and the price to rise.
Previous halves have taken the Bitcoin price to new all-time highs, and the same is expected this time.
I will keep a close eye on this in the coming weeks. pic.twitter.com/3W2v3rs5PM
– MeanHash⛏️🤖⛏️ (@MeanHash) May 12, 2020
Miners still dump BTC at the same pre-half rate
However, initial data shows that miners are not holding onto their now more expensive BTC and are dumping the same USD equivalent on the market as yesterday.
It’s been less than 24 hours since the halving, so the data is too new to really understand whether a trend is set to emerge, but for the time being, the event hasn’t had the first impact that was long expected.
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In the past, more than 100 days of side-trading took place after each Bitcoin halving, before reaching the price before halving again. However, after that it went into the races and Bitcoin started to rise to almost $ 20,000.
According to the hash ribbon indicator, the capitulation happened in late December 2018, again in December 2019, and then on Black Thursday. Could there be another capitulation that will bring down the Bitcoin price, or will miners just take their time before moving to a holding pattern for their newly minted BTC?