Investors are hoping for a Bitcoin (BTC-USD) halving event in the near future, as early as this weekend. Bitcoin price has retreated from recent highs and was trading above $64,000 as of Friday. During this event, the reward for mining new Bitcoin blocks is cut in half, slowing down the rate at which new Bitcoins come into circulation.
Yahoo Finance's Julie Hyman and Madison Mills break down the details and provide insight into the impact on Bitcoin miners' profit margins.
Want to learn more about Bitcoin halving? Watch this video from Yahoo Finance for a quick explanation. Bitcoin Halving: Explained
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video transcript
Madison Mills: Well, the Bitcoin halving event is scheduled to take place this weekend. This event cuts the amount of new Bitcoin available each day in half, which is a blow to mining companies. Bitcoin price is currently hovering around the 64,000 mark, where it has gained almost a percentage point on the day.
But Julie, this morning on our previous program, the CEO of CleanSpark was telling his colleagues that this macro reaction is happening because of the macros here. But amidst the net outflow, as seen in grayscale, there is also a rebound. I know you are knowledgeable in this field.
These record outflows reached $1.6 billion today, a 50% decrease since trading began. It's not just affecting Bitcoin, he said, but it's also affecting these mining companies. So whether this halving event will have a similar impact to what we've seen in terms of greyscale spills, or whether it's nothing for the miners and they've already priced it in. Please, I would like to know.
Julie Hyman: It's hard to predict what will happen. So we're talking about effectively cutting the rewards you get per Bitcoin in half. So they're doing the exact same thing, and they're getting half the profit on that exact same thing.
So, how – I mean, you know, we spoke with the Riot Blockchain CEO earlier in the week. Or was it last week? And he admitted it. And, he said, he expects prices to rise in the long run.
Madison Mills: right.
Julie Hyman: That's how you get back to normal. And historically, that's what happened after the halving. Therefore, Bitcoin may fall in the short term. It sometimes goes up. However, over the long term, one year after the halving, Bitcoin has historically risen. So that's what they're betting on, and that's what Bitcoin investors are betting on as well. But as we know, past history does not guarantee future results. That's what tended to happen. Will it happen again? Let's take a look.
Madison Mills: In other words, it took four years to prepare. Maybe that's what's influencing it…
Julie Hyman: Yeah.
Madison Mills: –On that note, it's great that so many guests are mirroring. That means they're going to stay in mirroring no matter what. So, whatever happens, whatever happens.
Julie Hyman: Yes, as Michael Saylor said, whoever owns the most Bitcoin wins.
