What’s Bitcoin ‘Halving’? Does it raise prices?

In preparation for the block rewards halving in April, miners have started selling more coins to strengthen their balance sheets and finance development capex, according to Matthew Sigel, head of digital-asset research at VanEck. "The importance of scale will be magnified following the halving.

Bitcoin miners use power-hungry machines to solve complicated riddles and safeguard the network; the amount of Bitcoin they get is cut in half every four years. Limiting the total amount of Bitcoin to 21 million tokens requires a halving of the supply. The next event reduces the reward every block from 6.25 coins to 3.125 coins.

Since the first US exchange-traded funds to directly own the digital asset were approved on January 10th, the price of Bitcoin has been struggling, and the miner sales seem to be adding to that problem. During that time, the token's value dropped by almost 6%, reaching $43,000.

According to CryptoQuant, 3,617 Bitcoin have been transferred from miner wallets to exchanges since the ETF approvals. The biggest single-day efflux since December 2020 occurred on February 1st, with a net outflow of 13,542 tokens.

“Miners seem to be selling their holdings of Bitcoin to finance the acquisition of more effective mining equipment," crypto exchange Bitfinex noted in a recent note. "The smaller mining operations could be particularly hit by the decline in revenue, which could lead to their demise

While smaller mining enterprises may be using their Bitcoin reserves or generating finance through share sales, larger corporations have been making use of their cash on hand and access to the financial markets

United States-based miner Marathon Digital Holdings Inc. has previously stated its intention to liquidate Bitcoin holdings in order to pay for operational costs. However, ever since last year's debt reduction efforts, the company has been increasing its cash and Bitcoin holdings

One billion dollars in cash and Bitcoin are included on Marathon's balance sheet, according to Charlie Schumacher, VP of corporate communications.

Keep an eye out for more updates!