This is why Bitcoin’s halving could result in a $5 billion sale

The Halving Dilemma: Will Riot Platforms Struggle In The Face Of Bitcoin’S Big Shift?


In a few days, the Bitcoin (BTC) community will experience the highly anticipated halving event. This adjustment will reduce the mining reward from 6.25 to 3.125 BTC.

This affects the profitability of miners and affects the price of the crypto market.

10x Research gives a target of $122,000 for the top of the bull market

10x Research's Marcus Thielen showed significant market changes after the half. He said miners could flood the market with as much as $5 billion worth of bitcoins by hoarding reserves to manage reduced rewards.

The crypto market may face a major challenge during the six-month ‘summer' break as BTC miners prepare to sell large amounts of BTC inventory. These products, which have been painstakingly developed over the past few months, could disrupt market movements,” Thielen wrote.

Historically, Bitcoin has often experienced price spikes before halving, only to then enter a period of price movement. Despite the 32% price increase before the previous events, the market typically sees a long period of sideways movement lasting several months.

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Read more: Bitcoin Half Countdown

Bitcoin Price Action Post 2020 Halving. Source: 10X Research

Additionally, Hannah Pung from SpotOnChain discusses the impact of the delayed supply discount on pricing. She realizes that within 6 to 12 months after the halving, prices will increase significantly.

For example, following its first halving in November 2012, the price of Bitcoin rose from approximately $12 to over $1,000 in late 2013. After the second half in July 2016, the price of Bitcoin increased from $650 to about $20,000 in December 2017. The third half saw a price increase from $8,000 in May 2020 to a record $69,000 in November 2021.

Additionally, Bitcoin dominance has risen 15% since the November 2022 bear market low, overshadowing altcoins that have not shown similar strength. This slow reaction in the altcoin market may indicate that the expected post-halving rally will be longer.

Moreover, post-halving production costs nearly double for many miners, adding to the financial burden. For example, Marathon Digital reports that its production costs will increase from $23,000 to $46,000 per bitcoin. Such high costs add to sales pressure as miners strive to remain financially viable.

The efficiency of mining and the decrease in the price of hash will have a significant impact on the market dynamics after the halving. The hash price, or average revenue miners earn per block, is set to decrease in line with the reduced block reward. This drop further squeezes miners' income, forcing them to sell their bitcoins.

Read more: What Happened in the Last Half of Bitcoin? Predictions for 2024

However, after a short period of volatility, 10x Research gives a target of $122,000 for the peak of the Bitcoin bull market.

“Bitcoin could trade at 2.5x its production cost (~$122,000) at the peak of this bull market (post-halving). This $122,000 post-halving level could be the North Star if the bull market continues; higher Bitcoin prices (for this cycle) from production-to -BTC looks highly unlikely based on historical analysis of the expense ratio,” 10X Research said.

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