Despite the expectations of many investors and analysts, the bitcoin halving on April 20, 2024 did not trigger any significant price changes. The price of bitcoin remains stable at around EUR 60,000. This unchanged level suggests that the market has already priced in the halving, or that other factors are maintaining equilibrium.
Based on historical trends and the underlying mechanics of the bitcoin halving, we expect the price to continue to rise in the medium and long term after the current halving. Previous halves have shown that they often mark the beginning of longer uptrends in which the bitcoin price rises significantly. This is because the halving drastically reduces the supply of new Bitcoins while demand continues to grow, which can lead to a supply deficit.
For many miners with up-to-date hardware, bitcoin mining remains a profitable venture despite the recent halving. In particular, we recommend the Antminer S21 and S21 Hydro models, which can continue to provide good profits in the new market conditions thanks to their efficiency and performance. These machines are designed to work effectively even at higher levels of difficulty and therefore offer good profitability.
However, miners using outdated hardware may find that their equipment has become unprofitable after being cut in half at the current rate. The reduced block reward could cause operating costs to exceed revenue. In such cases, investors must carefully consider whether a potential future price increase could offset the current reduced revenue. This will require strategic planning and perhaps reinvestment in more efficient mining hardware to remain profitable in the long run.
In addition to the bitcoin halving, there are other exciting developments in the bitcoin community, most notably the new Runes protocol, which was introduced six months ago by Casey Rodarmor, the creator of bitcoin’s ordinal theory, in his blog. While Rodarmor expressed uncertainty about the practicality of developing such a protocol to enable fungible tokens on bitcoin, he recognized the potential for significant revenue from transaction fees, the opportunity to attract interest from developers, and the chance to expand bitcoin’s user base. The Runes protocol, which is based on the Unspent Transaction Output (UTXO) model and thus differs from the account-based BRC20 standard, offers a simpler approach to creating fungible tokens on Bitcoin. Rodarmor sees the protocol as a better alternative to the experimental BRC-20 standard and believes the fees it generates could have a positive impact on the price of bitcoin.
What is halving anyway?
Bitcoin halving is an event that occurs every 210,000 blocks on the blockchain, which is about every four years. During this event, the reward that miners receive for their work is halved. Originally, bitcoin started with a block reward of 50 bitcoins per block. After the first halving in 2012, the reward was reduced to 25 bitcoins per block, then to 12.5 bitcoins per block in 2016, and so on.
Halving is a central part of the Bitcoin protocol and is used to reduce the amount of new Bitcoins put into circulation. This slowly but steadily reduces the supply of new Bitcoins.