Three Possibilities for Crypto Mining After Bitcoin Halving
The relative increase of coin price and network hashrate is a significant reference to measure the living environment of the crypto mining industry. If the increase of coin price is greater than that of network hashrate, then the mining industry will be prosperous, otherwise, the living space for crypto mining will be squeezed. According to the current coin price and network hashrate, the relative changes of the two have been misplaced. What will the crypto mining industry face in the next six months?
By April 25, bitcoin price of $7541 was still lower than the average value of the first bitcoin halving, which was at a low level in nearly half a year. However, the network hashrate has recovered to above 110EH / s, which is close to the level at the peak of this year’s coin price. As bitcoin’s fork coin has finished halving, the computing power will be switched to bitcoin; with the approaching of the wet season, the adjustment of the electricity charge, as well as the machines with powerful computing power, will be put into use after the halving will be the important factors affecting the network hashrate.
According to the trend of the previous halving, there may be three possible changes in the living environment for crypto mining after the halving. The first possible trend is that if the coin price rises after halving, according to the historical trend plus the wet season, the network hashrate will rise.
Assuming that the decrease of computing power in the half-year after each halving, the increase of computing power in the half-year after this halving may not exceed the 42% increase of computing power after the second halving. According to the maximum of 42% increase in computing power, if the bitcoin price increases by more than 42%, the mining industry will obtain excess profits, and the profit environment will be significantly improved compared with the current situation. According to the price of $6872 on April 22, the price rose 42% to $9785. On the contrary, if the rise of the bitcoin price is lower or slightly higher than that of the network hashrate, the mining industry may not be able to obtain excess profits.
The second possible trend is that after the halving, the coin price fell, and it has fallen to the red line of the mining industry, for example, when the power is turned on at a loss, then the computing power may decline. If the decline of coin price is greater than that of network hashrate, it means that there is still computing power surplus in the market, and computing power may continue to be eliminated at this time. When the decline of coin price is less than the decline of computing power, there may be new computing power to enter the market again, which is driven by the future rise space of coin price. Here, the magnitude of the decline depends on the survival red line of the miners.
The third possible trend is that after this halving, the coin price declined, but the decline is not large, and the computing power is still growing but the growth rate has slowed down, like that in the second half of 2018. Then, the living environment of the mining industry after the halving is similar to the current one, but it will be more severe. The upcoming bitcoin halving, either survival or destruction, is a challenge for miners.