And they are moving. Miners were booted out of China and they decided to head our way.
Apart from the fact that we will benefit from the new Bitcoins being mined, it is also timed perfectly.
A tweet by CoinShare showed that Bitcoin’s value increases per halving cycle.
Halving is an event built into the Bitcoin network. This is when the reward for miners are cut in half whenever 210,000 blocks are mined, which happens roughly every four years.
Currently that reward is 6.25 BTC. It used to be 12.5 BTC, and before that, 25 BTC. When the next halving occurs, sometime in 2024, a block will contain only 3.125 BTC.
Any asset that becomes scarce and harder to get increases in value. That is what is happening with Bitcoin. It is becoming more and more scarce. The value will go up.
In the first halving in 2012, Bitcoin reached a high of approximately $30. In the 2016 halving, it was $1,200. In the 2020 halving, it went to $20,000.
Bitcoin has since gone up north of $60,000 before dropping to the $30,000 range because of market and political events.
But track record shows that it will go up.
Obviously, past performance is no guarantee of future results, but the math suggests incredible upside potential.
All that said, we are set to benefit from this. Assuming we manage to keep the miners here.
China used to dominate mining with up to 75% of all Bitcoin rate. But 90% of miners have already left China.
Blockchain.com data already shows that the global hashrate, a measure of the computational power used per second by the Bitcoin network, has fallen 50% from its peak in mid-April. It’s now at its lowest level since November 2020.
As an investors, the one thing you should take away from this is the potential.
The crypto market has been on an extended dip and it’s sending some into panic.
Yes, the crypto market is volatile. Yes, there will always be a possibility of loss. That’s true in every investment.
But numbers say Bitcoin and other cryptos are here to stay. It is a young asset and it will go through so much more turmoils but it’s here to stay.