After scrutinizing the market dynamics, analysts forecast a substantial liquidation of Bitcoin by miners, estimating that a staggering $5 billion worth of BTC could flood the market post-halving, a pattern observed in historical cycles.
Markus Thielen, the head of research at 10x Research, articulated his projections indicating the potential liquidation of $5 billion in BTC by miners following the halving event.
Thielen elaborated, suggesting that the aftermath of this sizable sell-off could linger for a considerable period, spanning four to six months. This projection rationalizes the anticipated sideways movement in Bitcoin’s price in the coming months, a trend observed after previous halving events.
Drawing parallels to past occurrences, Thielen stated the likelihood of history repeating itself, envisaging crypto markets grappling with what he terms a “six-month summer lull.”
Reflecting on the aftermath of the 2020 halving, Bitcoin prices remained range-bound between $9,000 and $11,500 for five months. Extrapolating from this, the halving slated around April 20 this year could delay any substantial upward momentum until around October.
Thielen further took into consideration miners’ behaviour, highlighting their inclination to accumulate BTC in anticipation of the halving. This accumulation trend typically triggers a supply-demand imbalance, propelling Bitcoin prices upward.
As evidence, Bitcoin surged by 74% in 2024, reaching a pinnacle of $73,734 on March 14 before a subsequent dip below $63,000 in mid-April.
The analyst also shed light on the ripple effect on altcoins, elucidating their regression from peak values in 2021. Despite conjecture surrounding a potential altcoin rally post-halving, Thielen referenced historical data, indicating that such rallies typically manifest approximately six months later.
Zooming into specific mining operations, Thielen spotlighted Marathon as the world’s largest Bitcoin miner, hinting at their accumulated inventory likely to be methodically offloaded post-halving to avert revenue shocks. Marathon’s current daily production of 28–30 BTC could translate to an additional 133 days of supply in the market post-halving, with ongoing production hovering around 14–15 BTC per day.
In a hypothetical scenario where all miners adopt a similar strategy, Thielen envisaged a potential daily sell-off of up to $104 million worth of Bitcoin post-halving, a move that could potentially rebalance the supply-demand equation driving the recent price surge.
As the countdown to the halving progresses, slated to slash miners’ daily Bitcoin rewards to 450 from the current 900, the industry faces revenue losses estimated at approximately $10 billion annually.
In preparation for this event, entities like Marathon Digital Holdings and CleanSpark have ramped up their efforts, investing in upgraded equipment and strategic acquisitions to mitigate revenue declines.
Matthew Kimmell, a digital asset analyst at CoinShares, emphasized the urgency among miners to maximize revenue before the impending halving-induced revenue reduction.
Marathon CEO Peter Thiel cited the company’s break-even threshold post-halving, pegging it at around $46,000 per BTC and anticipating minimal price fluctuations in the six months following the event.
Echoing sentiments of optimism, Alvin Kan, COO at Bitget Wallet, anticipates a bullish cycle following the halving, attributing ETFs as a significant catalyst in shaping market dynamics. Since the SEC’s nod in January, spot Bitcoin ETFs have witnessed unprecedented growth, with cumulative net inflows surpassing $56.27 billion, buoying Bitcoin to its all-time high early in the bull market.
Kan anticipates sustained positive momentum in ETF flows post-halving, buoyed by investors keen on leveraging Bitcoin’s historical price surge post-halving to their advantage.