May 22, 2024
Bitcoin Halving Spurs Mining Shifts, Analysts Suggest
Bitcoin Halving

Bitcoin Halving Spurs Mining Shifts, Analysts Suggest

Bitcoin’s stability amid ‘flattish’ price action is seen as a boon for miners amid competitive hash-rate wars say analysts.

Analysts at Bernstein Research and Brokerage, Gautam Chhugani and Mahika Sapra, have highlighted the current “flattish” price action of bitcoin as potentially beneficial for miners, particularly in the context of competitive hash-rate wars. In their note to clients on Monday, the analysts expressed confidence in the market, anticipating that bitcoin’s price will remain range-bound before breaking out to the upside.

Bitcoin Mining Difficulty Drop Post-Halving

Recent data reveals a significant drop in Bitcoin mining difficulty, marking the largest negative adjustment since the bear market lows in 2022. The adjustment, a 5.7% drop, occurred on Thursday, following a 10% decline in network hash rate since the last adjustment on April 24.

Bitcoin mining difficulty serves as a measure of the effort required to mine new blocks, adjusting every 2016 block to maintain an average block time of 10 minutes. This adjustment responds to changes in the number of miners active on the network.

Source: Bernstein

The analysts attributed the recent difficulty adjustment to a combination of weaker price support and increased costs post-halving, resulting in some higher-cost mining operations shutting down.

Source: Bernstein

Impact on Public Bitcoin Miners

Despite the overall decrease in the Bitcoin network’s hash rate, publicly listed miners such as Marathon Digital, Riot, and CleanSpark have seen a slight increase in market share. Chhugani and Sapra anticipate further consolidation of market share among these miners through organic growth and merger and acquisition activities.

Source: Bernstein

CleanSpark’s recent acquisitions in Mississippi and Wyoming, along with Marathon’s expansion efforts and Riot’s capacity-tripling plans in Texas, underscore the strategic moves these miners are making to strengthen their positions in the market.

Analysts Double Down on Bitcoin Price Prediction

Last week, Bernstein analysts reaffirmed their bullish stance on Bitcoin, doubling down on their $150,000 price prediction for this cycle. They cited various factors, including the favorable market conditions for miners and the growing institutional adoption of Bitcoin, as reasons for their optimistic outlook.

Conclusion

While bitcoin’s price may currently be experiencing relative stability, analysts believe this presents an opportunity for miners to solidify their positions and prepare for potential upside movements in the future.

Image by WangXiNa on Freepik

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