Bitcoin price drops in the new year, and the "Bitcoin miner war" begins

At the beginning of the new year, Bitcoin remained sideways. According to data from blockchain expert Coinicle, on New Year's Eve 2019, although Bitcoin once hit $7,318, it quickly fell back and fluctuated between $7,100 and $7,200. Starting at 10 a.m. this morning, Bitcoin fell slightly, and briefly fell to around $7,150.

Looking back at the trend in the second half of 2019, Bitcoin reached its annual peak of around $13,000 in early July, and then entered a five-month decline and adjustment period. In the week of September 23, Bitcoin fell from $10,000 to $7,700, the largest decline of the year; thereafter, due to favorable Chinese policies, on October 25, Bitcoin soared from a low of $7,300 to around $10,300 overnight.

However, the overall bear market trend has not subsided. From November to December, Bitcoin fell from $8,600 to around $7,000. It occasionally fell below $6,500, but was quickly pulled up again. As of today (1/2), it is still fluctuating between $7,000 and $7,600.

Imagination of the market in 2020

Weibo celebrity William Blockchain elaborated on his imagination of this year's market. He said: "There is definitely nothing wrong with the big market before and after the halving, but will it be the big bull market like in 2017? It's hard to say."

To the outside world, Bitcoin is synonymous with all cryptocurrencies and blockchains, but it does not bring the biggest profit in every bull market. In the 2013 bull market, the most profitable ones were the numerous altcoins that exploded; in the 2017 bull market, the craze was triggered by the thousand-fold increase in Ethereum and the ICOs that continued to create wealth myths.

However, halving is still a necessary turning point in the Bitcoin market cycle, and William of Blockchain pointed out:

1. The hype surrounding Bitcoin halving is greater than its actual significance, which means that consensus is more important.

2. Halving is the entrance to the bull market cycle and has little to do with mining itself.

3. The price is neither too high nor too low. Sooner or later, we will enter the era of pricing in satoshis.

4. The vested interests are likely to be the future buyers.

Looking back at historical data, Bitcoin has only experienced three truly explosive bull markets (only a few hundred hours in 10 years saw significant increases), and the rest of the time it was mostly sideways or falling. In 2020, Bitcoin has entered the pre-halving stage, and there will still be one or two big rallies, but the real crazy bull market may not arrive until 2021.

The battlefield of halving belongs to miners

Yuzo Ghana talks about the 2020 halving (part), captured from Twitter.

Yuzo Kano, CEO of BitFlyer Blockchain, believes that the halving will be closely related to miners. He pointed out that currently on the Bitcoin chain, on average, miners receive 12.5 BTC block rewards every ten minutes, which can provide a stable supply of 6.57 million bitcoins within the year and contribute about 512 billion yen (about 32.7 billion yuan) in output value. But after the halving, the block reward will change from 12.5 BTC to 6.25 BTC, and miners will inevitably face the situation of "deficit financial report". At this time, miners have two choices:

1. Should I pay the electricity bill or give up mining?

2. There is no choice but to sell the Bitcoin immediately after mining it, or hold on to it to keep the price rising.

Many miners think that they want to push the price up and sell before other miners. Garner believes that if the internal rate of return (IRR) of miners deteriorates and the market continues to refuse to sell, the supply and demand will change greatly and the price will rise. He believes that this imbalance in supply and demand is one of the main reasons why Bitcoin was able to rise from a low of $3,000 last year.

For miners, how to measure the internal rate of return and machine performance is a big problem. The halving market in 2020 will depend on how intense this "miner war" is.

Source: coinicle