The surge underway Bitcoin Bitcoin/USD prices are proving to be a boon for cryptocurrency miners. Their revenues have risen to unprecedented levels, thanks to a perfect storm of factors including the impending halving and growing interest from Wall Street, German bank said in a research note.
What happened: Daily mining revenue hit a new high of $78 million on Monday, coinciding with Bitcoin’s surge toward the record $72,000 mark, Business Insider reported. Industry experts predict even higher prices in the coming months.
The surge is attributed to Wall Street’s growing acceptance of Bitcoin, with 11 spot Bitcoin ETFs launched in mid-January. This success has prompted multiple institutions, including Wells Fargo AND Merrillto enter the market.
Other factors driving the boom include regulatory changes, relaxed monetary policies and the upcoming halving event. The latter, which occurs every four years and reduces the Bitcoin reward for miners, has led to a $1 billion investment in new equipment by 13 companies since February 2023.
“The last halving occurred in May 2020, reducing the miner reward from 12.5 to 6.25 bitcoins per block. Miners saw their profits reduce significantly overnight. Many have been forced to close obsolete plants that have become unprofitable to operate,” Deutsche wrote.
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Despite the potential impact on profits, the halving cycle is expected to fuel the price rally, as seen in previous cycles. Analysts believe higher prices could lead miners to sell less Bitcoin, reducing supply and further driving up prices.
Last year, analyst at Standard Chartered Geoff Kendrick noted that the token’s high prices could cause miners to sell fewer acquired bitcoins to maintain profitability. As a result, companies could reduce asset sales, leading to a decrease in supply and potentially pushing bitcoin prices even higher. In his latest projection, Kendrick predicts bitcoin will reach $100,000 by the end of 2024, fueled by inflows into ETFs.
Because matter: The halving cycle could further boost the price rally for Bitcoin investors. Historically, Bitcoin prices have seen significant increases in the month leading up to the halving. Higher prices could mean that miners will have to sell less of the Bitcoin they acquire to maintain profitability, potentially reducing supply and pushing Bitcoin prices even higher.
Additionally, according to a report from Kaiko Research, Bitcoin’s surge in value is generating around 1,500 new “millionaire wallets” every day. This indicates growing interest and investment in cryptocurrency.
Despite the all-time highs, market analysts believe Bitcoin is not overcooked. Todd Gordonfounder of Inside Edge Capital, highlighted the contrast between Bitcoin’s slight pause and the sharp decline in semiconductor stocks.
Read next: Bitcoin vs. Ethereum vs. Shiba Inu vs. Doge: How much would you have now if you had invested $1,000 in each of the cryptocurrencies at the start of the current bull run
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