Bitcoin’s most recent trading was up 2.3% over the past 24 hours at $9,106. Steadily rising since May 13, bitcoin is trading above its 10-day and 50-day moving averages, which is promising for investors. However, what does it mean for less efficient miners? The most anticipated event in cryptocurrency for the year 2020, the Halving did usher in a slow but continuous rise in bitcoin prices. However, with the reward for mining having been halved to 6.25 BTC, the question lingers of whether miners will continue to be motivated to mine, and thus to maintain bitcoin’s security architecture. In essence, miners just took a 50% pay cut at a time of coronavirus-fueled economic uncertainty and instability, with the costs of mining having risen exponentially since 2009. At the dawn of bitcoin, mining individually at home was still feasible and far more rewarding three halving ago. Now, miners largely work in teams and through companies, for the computing power required and the costs of mining infrastructure and electrical requirements make mining individually both hardly feasible and financially prohibitive. However, one mining metric that immediately jumped after the Halving was miner revenue from fees, which went from 4.6% to 7% Wednesday.
Will this third Halving cause some miners to bow out of what may already be an oversaturated labor market, and will the less efficient among the pack thus make way for the more successful? It’s possible that the dynamics may change, with exchanges having to charge more in trading fees to justify their operating expenses.
The anticipation in the Halving lay with investors, whose hope that the new relative scarcity of bitcoin would make it even more valuable over time, assuming that demand stays the same. In fact, bitcoin’s price appreciation is steadily increasing, and with upheaval in traditional markets, it is outperforming several traditional assets, such as gold. As of Wednesday afternoon, other digital assets trading in the green were Ether, link, miners, and IOTA. Meanwhile in the commodities markets, oil trading, the headache of the last several months, is flat.