The Upcoming Bitcoin Halving and Survival of the most efficient Miners

2023-09-28, 02:39

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![](https://gimg2.gateimg.com/image/article/1692587449analysis.jpeg)
## [TL; DR]
The next <a href="/uk/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> halving is likely to occur on 17 April 2024.

To increase bitcoin mining efficiency firms should acquire the latest machines like Antminer S19 XP.

Bitcoin mining firms that have cheap and sustainable energy sources have a greater chance of generating more profit than those with more expensive electricity. 
## Introduction 
Decentralized currencies like bitcoin have their own inbuilt monetary policies based on their smart contracts. For instance, it is bitcoin’s inbuilt mechanism that controls the supply of the coin which affects its value.

In this guide we shall discuss what bitcoin halving entails as well as how it affects the price of BTC. We will also look at how different market participants including miners and traders can prepare for the next halving event. 
## 2024 Bitcoin Halving Event Approaches
As hinted above, the world’s first cryptocurrency, Bitcoin (BTC), has a unique systematic means of stabilizing its value and ensures scarcity. Basically, bitcoin halving, also [called halving](https://www.gate.io/blog_detail/1067/bitcoin-halving-what-it-is. "called halvening"), regulates the circulating supply of the coin. The reason is that the supply of the coin has many implications for its digital economy.

According to the website Buybitcoinworldwide, as of 23 September there were about 206 days before the next event, expected to take place on 17 April 2024. 
![](https://gimg2.gateimg.com/image/article/169586828110251695867892_.pic.jpg)
2024 Bitcoin Halving event - Buybitcoinworldwide

As the diagram above shows, the date of the halving event is fast approaching with only 31,040 blocks left before that momentous occurrence. The next picture gives us the real statistics.
![](https://gimg2.gateimg.com/image/article/169586839810271695867947_.pic.jpg)
The Number of Blocks before the Next Bitcoin Halving Event - Buybitcoinworldwide
## What is Bitcoin Halving?
It is time for us [to explain bitcoin halving](https://www.gate.io/de/live/video/90a60ad65c730ed340e1165cf554c732 "to explain bitcoin halving"). Bitcoin halving is the pre-programed event where the blockchain reduces the number of coins it emits into circulation. It occurs when the bitcoin system decreases the amount of BTC that a miner gets for validating every transaction. Validation of transactions takes place when a specific miner adds a new block on the bitcoin network.

We can also refer to the transaction validation process as a means of creating new bitcoin through solving a complex cryptographic puzzle. It is important to note that the bitcoin system has a maximum supply of 21 million coins.

When the bitcoin blockchain was launched in 2009 each block comprised 50 BTC. Nonetheless, the number of bitcoins in a block decreases after the production of 210,000 blocks, which occurs after a period of about 4 years. The following table shows the changes in BTC mining rewards since 2009 when the coin was launched.
![](https://gimg2.gateimg.com/image/article/169586847010281695867962_.pic_hd.jpg)
Past and Future BTC halving Events- BNBstatistics

As the picture indicates, the first BTC halving event occurred on 28 November 2012 when the bitcoin mining reward was reduced from 50 to 25 BTC.

The next bitcoin halving event took place on 9 July 2016 when the reward dropped to 12.5 BTC.  The most recent halvening occurred on 11 May 2020 when the mining reward was slashed to 6.25 BTC. Right now, we are less than a year from the next bitcoin halving that will further reduce the bitcoin mining reward to 3.125.

It is worth to note that the last bitcoin [halving](https://www.gate.io/bitwiki/detail/119/halving "halving") is likely to occur in 2,140. The period after that event will lead to the completion of BTC mining that will result in 21 million BTC in supply. That also means that the validators will no longer mine bitcoin and the BTC mining industry will shut down. However, validation will still continue as it helps to secure the bitcoin blockchain. What will change is the source of bitcoin miners’ rewards.

Read also: [Bitcoin Halving: Countdown to the Next Crypto Bull Market](https://www.gate.io/explore/bitcoin-halving-countdown "Bitcoin Halving: Countdown to the Next Crypto Bull Market")
## Effects of Bitcoin halving 
Bitcoin halving has several effects on the viability of the bitcoin ecosystem. First, it slows the quantity of bitcoins that enter the market within a period of time such as a month, thereby promoting scarcity and reducing the coin’s inflation. Bitcoin scarcity may help to increase its demand which may positively affect its price.

Read also: [BTC halved for the fourth time. How does it affect the supply of BTC?](https://www.gate.io/blog_detail/1866 "BTC halved for the fourth time. How does it affect the supply of BTC?")

In fact, if the supply of BTC slows down while the demand level is constant or increasing its price will rise. That is the reason why the market experienced bull runs after the past halving events. The next graph illustrates how the price of BTC increased remarkably following the past three BTC halving events. 
![](https://gimg2.gateimg.com/image/article/169586856810291695867978_.pic.jpg)
Price Changes after Halving Events - Buybitcoinworldwide

The three blue lines indicate the BTC price changes after each halving event that occurred on 2012-11-28, 2016-7-9 and 2020-5-11, respectively.

As an example, after the 2012 halving event the price of bitcoin surged from $12 to over $1,000 within one year. Similarly, after the 2016 halving event the BTC price rose to $20,000 by the end of 2017. You can see the percentage changes in the price of bitcoin after the halving events in the next diagram.
![](https://gimg2.gateimg.com/image/article/169586858810301695867991_.pic.jpg)
Effects of Bitcoin Halving on BTC Price - BNBStatic

As the image indicates, the BTC price surged by a large percentage after each halving event. For example, after the 2012 halving the BTC price increased by about 9,212%.

As explained explicitly before, the bitcoin halving results in a decrease of the miners reward. [After the 2024 halving](https://www.gate.io/blog_detail/1800/bitcoin-halving-in-2024-will-btc-have-another-bullrun "After the 2024 halving"), for example, the bitcoin mining reward will decrease from 6.25 BTC to 3.125. There are several factors that will impact the miners’ profit level or losses. Some of these factors include the cost of electricity, the existing BTC price, the general crypto market environment and the mining efficiency.

Roughly, the Wall Street giant JPMorgan has predicted that after the 2024 halving event the cost to mine bitcoin may exceed $40,000. This means that if the price of BTC remains below $30,000 most, if not all, miners will make losses.

High cost of electricity, for example, increases the cost of producing bitcoin which reduces profitability or increases losses. Unreliable mining equipment which require high maintenance may also increase operational costs. In this regard, Kerri Langlais, chief strategy officer at bitcoin miner TeraWulf (WULF) said, “Energy cost and equipment efficiency will determine winners and losers post halving.”

Therefore, the most efficient miners will survive. Many mining firms are already planning how to cope with the situation that will exist after the 2024 BTC halving.

Read also: [Prediction of BTC Halving from 2024 to 2031](https://www.gate.io/blog_detail/1884/prediction-of-btc-halving-from-2024-to-2031-btc-may-exceed-400-000 "Prediction of BTC Halving from 2024 to 2031")  
## How Miners Preparing for the Post-2024-Halving Event Period
Most miners are instituting various measures to handle the possible increase in operational costs after the 2024 halving event. As an example, several crypto mining firms are upgrading their machines to increase efficiency. Read also: [BTC will surpass $100K after the 2024 BTC halving Event](https://www.gate.io/blog_detail/1873/btc-will-surpass-100k-after-the-2024-btc-halving-event "BTC will surpass $100K after the 2024 BTC halving Event")

Many of these companies are purchasing the latest versions of bitcoin miners like Antminer S19 XP, which is currently the most efficient mining machine at the moment. Marathon Digital (MARA), [CleanSpark (CLSK)](https://www.cleanspark.com/investor-relations/news-releases "CleanSpark (CLSK)") and [Riot Platforms (RIOT)](https://www.riotplatforms.com/news-media/press-releases/detail/155/riot-purchases-7-6-ehs-of-next-generation-miners-from "Riot Platforms (RIOT)") recently announced their acquisition of the latest bitcoin mining machines. Better mining equipment will enable them to deal with a rise in bitcoin difficulty.

Also, several mining firms are working on utilizing sustainable and non-renewable energy. This is because one of the greatest costs of mining bitcoin is that of electricity.  Some of them have already sourced fixed price energy contracts while others have devised ways of curtailing their energy usage. For instance, Riot Platforms will be active in the Electric Reliability Council of Texas (ERCOT) market. 
## Building of Cash Reserves
Past experience has shown that the price of bitcoin does not rise immediately after the halving event. After the 2020 halving the BTC price only rose after five months. Therefore, the BTC miners should increase their cash reserves to cover up for the rise in the cost of production before there is <a href="/uk/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin price</a> upward traction.

Cryptocurrency exchanges also have a big role to play after the halving event. For example, they should be ready to handle any increases in bitcoin transaction volumes as well as the rise in market volatility. Again, they should create suitable systems to provide accurate, timely and reliable information to their customers.

Bitcoin investors such as traders should prepare well in advance. Since traders make money through bitcoin speculation they should invest in it before the halving event. Assuming that the BTC price will rise, the more funds they invest in it the more they will earn after halving. 
## Conclusion
The next bitcoin halving event will occur in April 2024. It will result in a decrease of the mining reward from 6.25 BTC to 3.125 BTC. The price of electricity and the cost of acquiring and maintaining mining equipment determine the profit the miners will generate or the loss they will make. Therefore, firms operating in the bitcoin mining industry should source cheap energy and acquire the latest BTC mining machines to generate profit or minimize losses.   
## FAQs about Bitcoin halving
### Does bitcoin halving affect mining?
Bitcoin halving reduces the amount of bitcoin mined when a validator solves a cryptographic puzzle as a means of verifying a transaction on the blockchain. A halving event reduces the miner’s reward by half which decreases its issuance rate.
### How are miners preparing for the next bitcoin halving?
Many bitcoin miners are acquiring better mining machines, sourcing cheap energy and building their BTC reserves. They should improve their mining efficiency since bitcoin difficulty may rise after the halving event. Also, the reduction in mining rewards may decrease their profit or increase losses.
### What happens to miners after halving?
After halving the miners will get half of the current mining rewards. Therefore, instead of getting 6.25 BTC they will be getting 3.125 BTC.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
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