Following the completion of its fourth halving event on Friday, Bitcoin experienced a slight increase in value to start the week. The cryptocurrency’s price climbed by 1.8%, reaching $65,891.28, as reported by Coin Metrics. Ether also saw a rise of 1.5%, reaching $3,198.06.
Publicly traded cryptocurrency mining companies benefited in premarket trading on Monday, continuing the rally observed before the halving. Marathon Digital and Riot Platforms, two of the largest miners, gained approximately 3% and 5%, respectively. CleanSpark and Iris Energy also experienced gains of 3% and 4%.
The halving event in Bitcoin’s code reduces the incentives received by miners by half, and it occurs roughly every four years. Its purpose is to slow down the issuance of new Bitcoins, creating a scarcity effect and preserving the cryptocurrency’s perceived value as digital gold.
Historically, the impact of halving events on Bitcoin’s price has taken several months to materialize, leading many investors to anticipate minimal immediate price fluctuations. However, JPMorgan has expressed concerns about potential short-term downside risks for Bitcoin.
Larger, publicly traded Bitcoin mining operations are generally well-equipped to handle the halving. They have been preparing for months, placing substantial orders for new and more efficient mining equipment, expanding their electricity capacity, and increasing their hash rates, which measure the computational power of crypto miners.
On the other hand, smaller and less efficient operations may face challenges and potentially be forced out of the market, leaving more market share for the remaining miners and presenting opportunities for mergers and acquisitions.
