The upcoming Bitcoin halving, scheduled for around April 20th, has many investors wondering about its impact on price. While the halving itself typically triggers a price surge due to reduced supply, a new analysis suggests a potential roadblock: Bitcoin miner selling.
According to Markus Thielen, head of research at 10x Research, miners could unload a significant amount of BTC in the months following the halving, potentially reaching $5 billion. This “selling overhang,” as Thielen terms it, could last for four to six months, mirroring historical trends.
Echoes of Past Halvings
Thielen points to the 2020 halving, where Bitcoin prices remained stagnant between $9,000 and $11,500 for five months after the event. This suggests a similar “summer lull” could be on the horizon for 2024, delaying any major price increases until potentially October.
The Miner Motive
The analyst explains that miners often accumulate BTC leading up to the halving, capitalizing on the pre-halving price surge. This dynamic certainly played out in 2024, with Bitcoin reaching an all-time high of $73,734 in March before a recent correction.
However, with the halving reducing their daily rewards, miners are likely to sell off some of their stockpiled BTC to maintain revenue. Thielen cites Marathon Digital Holdings, the world’s largest Bitcoin miner, as a potential example. Their current production could translate to an additional 133 days of BTC supply hitting the market post-halving.
The impact might not be limited to Bitcoin. Thielen suggests that altcoins, which have already seen significant price drops recently, could bear the brunt of this selling pressure. He argues that even if an altcoin rally follows the halving, historical data suggests it wouldn’t materialize for another six months.
A Market Correction Looming?
If miners collectively follow a selling strategy, Thielen estimates a potential daily sell-off of $104 million worth of BTC. This could significantly disrupt the pre-halving supply and demand dynamic that fueled the price surge.
Uncertainty Beyond the Halving
Adding another layer of complexity, Peter Thiel, CEO of Marathon, predicts a break-even point for his company around $46,000 per BTC post-halving. This suggests a potential lack of significant price movements in the immediate aftermath.
The Verdict: Brace for Impact?
The upcoming Bitcoin halving presents a scenario with both potential upsides and downsides. While the reduced supply could eventually drive prices higher, the initial impact might be a period of stagnation or even a correction due to miner selling. Investors are advised to closely monitor market developments and consider these post-halving dynamics when making investment decisions.
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