There are less than two weeks left until the Bitcoin halving.
At this moment it seems that it could happen on Saturday, April 20, or at the latest on Sunday, 21, unless the miners start turning off their machines earlier.
With the further increase in the market value of BTC, however, miners should try to make the most of their machines until the day of the halving, so it could even be anticipated to Friday 19.
The certain thing is that it will happen at block number 840,000, and now we are close to block number 838,300. In other words, there are only a little more than 1,700 blocks left, and since on average one is mined every nine minutes (or even less), within a dozen days all the remaining 1,700 blocks should be mined.
Summary
The effect on the price of Bitcoin of the anticipated halving
In the past, all three halvings that have already occurred (2012, 2016, and 2020) have had a positive effect on the price of Bitcoin. However, this effect has only manifested months after the halving, and this seems to not be well known to everyone.
Actually, unfortunately many of those who are buying BTC at over $70,000 each these days may be convinced that after the halving the price will rise even more, while instead the opposite could happen.
On the medium/long term it remains possible that the halving has a positive effect, but on the short term it could have a negative one.
In particular, if many of those who are buying now are doing so driven by positive expectations for the short term effect, such expectations may be disappointed in the days immediately following the halving.
It is possible that the current situation is a kind of mini-bubble due to excessive enthusiasm and a bit of FOMO, and if it were really so, it would still be destined to explode.
On the other hand, a completely different discussion is what can be done in the medium or long term, that is when the halving will actually start to have an effect on the price of BTC.
However, speculators are not used to waiting so long, so if their expectations are disappointed in the days following the halving, it is possible that they will start selling what they are buying now driven by an excess of enthusiasm.
The problem for Bitcoin miners after the fourth halving
At this moment, with the price of Bitcoin on the rise, back above $70,000, miners are doing business.
It should be noted that the weekly average hashrate is not at its highest. In fact, the hashrate measures how much competition there is among miners, and the maximum level was reached between the 12th and 13th of March, just before the price of BTC hit new all-time highs at $73,800.
However, the current level is only slightly lower (621 Eh/s compared to 628), and it is safe to bet that in case the price returns to its highs, then also the hashrate record will be broken.
The problem, therefore, will be after the halving, when the miners’ earnings will almost halve.
Fortunately, this is a widely anticipated and well-known event, so all miners already know how to behave. Most likely they will simply turn off the less efficient machines and sell the BTC accumulated so far by squeezing the most out of their machines.
Furthermore, in the weeks following the halving, the difficulty will be updated automatically, making the problem less and less serious, until it simply disappears altogether.
Only in the event that the price of BTC were to collapse, miners could really have big problems, because it is unpredictable.
Instead, as far as the halving of the BTC earned is concerned, this issue should have already been widely taken into consideration by all miners, so the problem from this point of view should already be under control.
The increase in fees
On the other hand, a completely different story is the one concerning the cost of on-chain Bitcoin transactions. This actually depends on the level of network congestion, which is not at all related to the halving.
The increase in the market value of BTC often leads to congestion, as it increases the number of transaction requests to be confirmed.
At this moment there are 120,000 transactions waiting to be validated by miners, and rarely more than 4,000 are validated per block.
Since a block is mined approximately every 9 minutes, it will take at least four and a half hours to clear the queue, and in the meantime, more will definitely be sent to be validated.
However, the fees are not particularly high.
For example, at the beginning of March the median had risen above $7 per transaction, while now it has dropped to $1.3. Still, in mid-March it was well above $3, so the situation in recent days has stabilized.
Today, however, fees could increase again, due to the increase in the price of BTC which increases the number of transactions.
Actually, even in the days immediately following the halving, fees could increase. In fact, it is possible that the hashrate will decrease, and therefore until the difficulty automatically decreases, the blocktime could rise above 10 minutes.
This would reduce the number of daily transactions validated by miners, effectively lengthening the queue of those waiting.
With the automatic adjustment of the difficulty, approximately every two weeks, this issue will be completely absorbed.
The Ordinals
It is worth noting that in the past few days, the transactions of Ordinals on the Bitcoin blockchain have increased again.
For now, this increase has not yet led to a significant increase in fees, but if it were to continue, it could do so.
Fortunately, the current fee level is not very high, so even in the event of a similar scenario, the increase could still be limited.
However, in the past there have been real flames, from this point of view, with very rapid and extensive increases in the number of Ordinals exchanged on-chain.
So it is not to be excluded that fees on BTC on-chain transactions may undergo sudden and significant increases in the coming days.
