Grayscale, a big digital money company, says that the upcoming Bitcoin halving in April 2024 might be different than before because of a lot of activity and improvements in how the market is doing.
The amount of new Bitcoin being made will be cut in half in April 2024. Analysts think that even though miners might face some difficulties with their earnings in the short term, the overall on-chain activity and positive market updates could make this halving unique. The report says we need to consider some important things for the upcoming halving, which are different from previous ones.
Miners are getting less money from block rewards and it costs a lot to mine. So, they are getting money by selling shares, borrowing money or selling their reserves.
Important fundraising activities like Core Scientific’s $55 million stock offering, Stronghold’s $15 million stock sale, and Marathon Digital’s ambitious $750 million stock and cash offering show that the industry is working hard to build up its financial reserves, according to analysts. Together, these steps show that Bitcoin miners are ready to handle the upcoming difficulties, at least for now.
Grayscale says that if some miners leave the market, the difficulty of mining could decrease, making it cheaper for other miners and keeping the network balanced.
According to experts, the rise of Inscriptions has brought a new surge of activity on the blockchain. As of February 2024, over 59 million digital collectibles called Non-Fungible Tokens (NFTs) have been created, and they have made over $200 million in transaction fees for miners. This trend will keep going because more developers are interested and there are new ideas for improving the Bitcoin system.
The popularity of Inscriptions had an impact on the Bitcoin network. As the rewards for mining blocks get smaller, it’s important to figure out how to motivate miners to keep the network safe. Right now, about 20% of the money miners make comes from transaction fees in these tokens. This new trend of recording activity can help make the network safer by bringing in more money from transaction fees.
Using Bitcoin ETFs more could take away some of the pressure to sell Bitcoin and change how the market works. It could create a steady demand that helps keep the price of Bitcoin high.
This is not advice on what to invest in.