The Halving Has Arrived The Country’s Scary Split Personality I have been thinking (could be dangerous) about the bitcoin halving. VanEck’s Matt Sigel, Head of Digital Asset Research, has a great new blog post on the halving, linked here. Matt’s article is a great explanation of the halving. This has historically been a bullish event for bitcoin. I wonder if that will be the case this time. I am definitely getting out of my commodity comfort zone here, but this does not happen to gold or copper miners. It would be a problem for traditional commodity miners if their mining costs doubled overnight. Currently, bitcoin miners are rewarded with 6.25 bitcoins for every block they solve. On Friday they will be halved. So they will get 3.125 bitcoins. Sounds bad for miners. If costs rise for gold and copper miners or for that matter, oil and gas producers, they cut production. When prices rise above the cost of production they increase production. Commodities are very simple. Bitcoin not so simple. I recently sold some property to a bitcoin miner who used some of his mined bitcoin to buy the property. He actually sold the bitcoin at 72,500. Lucky or smart? Who knows. We settled in dollars. He has always planned on shutting down his mining operation at this halving. In his case, he is facing higher energy costs and does not want to upgrade his equipment. It was always his plan to shut it down. But for bitcoin, the miners actually keep the ledger for all the existing bitcoin. If there are not enough miners to keep the ledger, what happens to Satoshi Nakamoto’s bitcoin? Does it still exist?
Maybe both smart and lucky?