Bitcoin's second halving will drive inefficient miners out of the game

Hexun Internet Finance News After three rounds of more than 10% surges, Bitcoin will undergo its second halving on July 9. Against this backdrop, will the surge continue? Where will Bitcoin go in the future? On July 8, the day before Bitcoin's halving, the Internet Finance Laboratory of Tsinghua University's PBC School of Finance and Huobi.com jointly produced the "2014-2016 Global Bitcoin Development Report," which stated that the arrival of the second halving cycle will lead to the elimination of some inefficient mining equipment and miners. Under the pressure of halving, miners must continue to work hard to keep their profits. When interpreting the report, Zhu Jiawei, vice president of Huobi Operations, believed that unless there is significant positive information about Bitcoin, such as the advancement of applications, it is unlikely that the price of Bitcoin will surge after the halving of its production. From 2009 to 2012, Bitcoin experienced its first halving. During Bitcoin's first halving cycle, the price of Bitcoin rose from zero to a maximum of $30. What drove the price up was people's recognition of the value of Bitcoin, not changes in supply. Therefore, before and after the first round of halving, Bitcoin did not see a big rise. In the half month before and after the last halving, the highest and lowest points of Bitcoin prices were $12.67 and $11.78 respectively, which was in a sideways state. The impact of this year's Bitcoin halving on prices has changed significantly from the last time. Before this round of halving, market sentiment surged, a large number of players entered the market, and affected by the risk aversion of Brexit , Bitcoin has experienced three rounds of big rises since May. At present, the application of Bitcoin is very fragile, and Bitcoin itself has no limit on the rise and fall, so once there is a relatively important news, the price of Bitcoin will fluctuate significantly. The issuance of Bitcoin is an open and transparent thing. Under such a mechanism, all participants in the Bitcoin system can make predictions and responses to this variable, which leads to the impact of production on prices being digested in advance. According to the latest sampling survey of Huobi.com, 80.77% of Huobi users trade Bitcoin for short-term profits and make profits through price differences; 13.81% of users regard Bitcoin as a safe-haven asset and hold it for a long time; and 1.26% of users trade Bitcoin for payment. At the same time, when explaining the research report, Zhu Jiawei believed that the arrival of the second round of halving cycle will lead to the elimination of some inefficient mining equipment and miners. Under the pressure of halving, miners must continue to work hard to keep their profits. In miner economics, the cost is various electricity costs, labor and various operating expenses, and the income is the Bitcoin reward obtained × Bitcoin market price. The halving of Bitcoin production means that the Bitcoin reward of miners has been cut in half, which also means that the income has been cut in half at this specific moment. In the last Bitcoin halving, about 20% of the computing power was eliminated. After that, more efficient mining equipment was put into the Bitcoin system, and the computing power quickly recovered and continued to grow rapidly. The impact of this round of halving on Bitcoin mining will probably follow the same logic.