As the Bitcoin halving approaches, the cryptocurrency community braces for potential market shifts. According to Markus Thielen, head of research at 10x Research, Bitcoin miners may offload up to $5 billion worth of BTC in the months following the event. This prediction suggests a possible stagnation in Bitcoin prices, similar to patterns observed in previous cycles.
Understanding the Potential Impact
Bitcoin’s halving, set to occur around April 20, will significantly reduce the block reward miners receive, potentially leading to increased selling pressure as miners adjust to lower revenue inflows. Thielen estimates this selling period could extend from four to six months, similar to the post-halving period in 2020 when Bitcoin prices fluctuated between $9,000 and $11,500 for five months.
Miner Strategy and Market Dynamics
Marathon, the world’s largest Bitcoin miner, exemplifies a strategic approach to this challenge. Thielen notes that Marathon has accumulated a considerable inventory of Bitcoin, which they plan to sell gradually post-halving to avoid a sudden revenue drop. This method could be mirrored by other mining operations, leading to a prolonged period of Bitcoin selling.
If miners collectively decide to liquidate part of their holdings, Thielen suggests this could result in up to $104 million worth of BTC being sold daily. This scenario would reverse the supply/demand balance that has previously fueled Bitcoin’s price rally leading up to the halving.
Altcoins and Broader Market Effects
The analyst also highlighted concerns for altcoins, which have historically shown volatility around the halving period. Despite some predictions of an altcoin rally post-halving, historical data indicates that such rallies typically commence almost six months after the event.
Industry Reactions and Adjustments
The potential for a significant post-halving sell-off poses questions about the broader impact on the cryptocurrency market and miner profitability. Marathon CEO Peter Thiel expressed concerns that the firm’s break-even rate post-halving would be around $46,000 per BTC, emphasizing the delicate balance miners will need to maintain to stay profitable.
