How Bitcoin Halving Can Affect the Crypto Stocks’ Bottom Line

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Bitcoin,Schwab Crypto Thematic ETF

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will undergo its fourth halving at the event block height of 840,000. Each block containing BTC transactions is ordered in a sequential chain of mining, hence the name “blockchain.”

In the latter case, Bitcoin mining difficulty is realigned . This means miners who stay plugged in will be more cost-effective in their operations because less computing power will be needed to secure the network. In turn, this would offset the reduction of BTC block subsidies.Conversely, when the BTC price goes down, Bitcoin mining difficulty also goes down because miners can no longer justify the cost of maintenance and electricity.

However, the uncertain geopolitical and macroeconomic situation related to inflation has reversed the trend over the last week. Owing to Grayscale’s continued outflows, the overall Bitcoin ETF flows are now in the negative selling pressure zone. When placed into historical context, a Bitcoin price retracement following the halving would not be surprising. Within 500 days, however, BTC prices tend to rally significantly, owing to greater scarcity vs. demand pressures.According to ByBit’s report, crypto exchanges may run out of BTC reserves post-halving if the current rate of withdrawals is sustained.

 

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