TL;DR

• Every ~4 years, BTC becomes twice as hard to mine - and because there is a fixed supply of 21M BTC ever created, the 'Bitcoin halving cycle' has historically marked the start of a ​bull run​.

• Post-halving, it will become twice as hard to mine the same amount of BTC; so mining costs are expected to roughly double, making the breakeven point somewhere between $20,000-$30,000.

• The good news is: the BTC halving cycle does make BTC more scarce. So as long as demand remains the same, the value of BTC should theoretically go up.

Full Story

Every coupla weeks we write a piece on the Bitcoin halving event that's due to take place in April 2024.

Why? Cause it's a hella important mechanism to understand when it comes to the value of BTC (and by association, all crypto valuations).

To recap (and ​quote​ ourselves):

“Every ~4 years, BTC becomes twice as hard to mine - and because there is a fixed supply of 21M BTC ever created, the 'Bitcoin halving cycle' has historically marked the start of a ​bull run​.

(Demand + scarcity = people valuing it more).”

But here's the thing.

Today, based on publicly available data (from publicly listed miners), each Bitcoin costs $10,000-$15,000 to mine.

At the current price of just over $26k, that's all fine and dandy. In fact, miners can make a neat profit.

But, post-halving, it will become twice as hard to mine the same amount of BTC; so mining costs are expected to roughly double, making the breakeven point somewhere between $20,000-$30,000.

The bad news is: if the value of BTC isn’t above $30,000, assuming no additional efficiencies are made (better chips, cheaper power etc.), mining operations could start operating at a gross loss.

The good news is: the BTC halving cycle does make BTC more scarce. So as long as demand remains the same, the value of BTC should theoretically go up.

We don't have a crystal ball, and this sure ain't financial advice.

But hey, sure is a fun concept to explain to your drunk uncle next family gathering.