Important facts:
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The manager believes that mining difficulty will collapse after the halving if the price of BTC does not increase.
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Marathon has 13,000 Bitcoins on its balance sheet, said Fred Thiel.
Fred Thiel, CEO of Marathon Digital Holdings, one of the largest Bitcoin mining companies in the world, put the impact of the next Bitcoin halving on the market into perspective. “I don’t think it will have a significant impact,” he said.
The businessman assured The Bitcoin (BTC) market “is more complicated” and does not depend solely on scarcity This could lead to a reduction in the rewards the network pays to miners. This event, called halving, is scheduled by the Bitcoin protocol itself to occur every 210,000 blocks, or about four years; The next one is expected to be in April 2024.
According to Thiel in a interview with the podcast The Crypto Conversation, The increase from 900 Bitcoins mined per day to 450 Bitcoins will have no real impact on the market. This is the theory of those who follow historical patterns, he assures us. Such trends suggest that “Bitcoin price tends to rise six months after the halving based on technical analysis such as charts, Elliot waves, and Fibonacci.”
Given this, Marathon CEO mentioned this He believes that the market is more related to the available liquidityDue to its nature as a risk investment. And even taking that into account, he noted that market liquidity did not see a significant increase in 2023 despite the 70 percent increase in the price of Bitcoin, emphasizing that there are a number of influencing factors.
Efficiency, “critical factor” for Bitcoin miners
Compared to the previous scenario, Thiel expressed that miners have no control over the price of Bitcoin, the hashrate, or the difficulty of the network. However, he stressed that they have control over critical aspects such as electricity costs, investments in mining equipment and balance sheet management.
In this sense, he emphasized that his company is well prepared “for everything that will happen.” Marathon owns around 13,000 bitcoins, he said; According to the CriptoNoticias price index, this equates to $335 million at the end of this article. To this, Marathon adds a reserve of $100 million in cash, “no significant debt, just convertible notes due 2026.”
Marathon’s CEO doesn’t see a big catalyst in the upcoming halving. Currently, “about 50% of mined Bitcoins are sold in the market each month, and miners may or may not sell, but I don’t think (the halving) has any real effect on the market beyond an emotional reaction,” said Thiel.
Despite it, For other, less prepared miners, the scenario can be much more negative. “If the price of Bitcoin does not increase, the difficulty of mining will collapse as many miners would not be able to cover the operating costs and the hash rate will decrease,” concluded the American businessman.