Report reveals BCH, BSV Block Halvings to Turn Miners towards Bitcoin

A new forecast revealed that Bitcoin (BTC) miners will keep capitulating because of low prices, but upcoming events for Bitcoin Cash (BCH) and Bitcoin SV (BSV) will fuel the turmoil.

Coin Metrics argued in the latest edition of its March 31 State of the Network reports that Bitcoin is in a spiral of miner capitulation. This would get worse, it said, before it gets better.

Coin Metrics Sees Pattern of Capitulation

Despite BTC / USD having recovered over 70 percent in two weeks since hitting lows of $3,700, prices for less efficient miners are still “almost certainly declined below the breakeven price”.

This is supported by the recent drop in the mining difficulty of Bitcoin, which has been the biggest negative move since 2011 at nearly 16 percent. More pain is in store, before the mining sector recovers.

“We expect miners to follow a cycle of decreased profit margins, increased selling, capitulation, and a culling of the least efficient miners from the network,” the report summarizes.

“Once this cycle is complete, the miner industry should return to a healthier state that is supportive of future price increases.”

However, turbulent times will continue hitting miners and impacting Bitcoin in the short term. Next month, BCH and BSV hard forks will both receive a block reward halving — reducing the number of coins awarded to miners per block by 50 percent.

Halving of Bitcoin’s own will only occur in mid-May and will halve miners ‘supply from 12.5 BTC to 6.25 BTC.

This gives a one-month window during which miners will direct more hash power to BTC, as their block reward will be higher despite the increased cost, Coin Metrics says.

“When Bitcoin Cash and Bitcoin SV halve their block rewards, this should force miners to direct even more hash power to Bitcoin as it will still have a 12.5 native unit block reward (instead of 6.25) for about a month longer,” the report adds.

“Therefore, we should expect difficulty increases for Bitcoin that should further squeeze profit margins for all miners.”

Abdulhay Mahmoud

Abdulhay Mahmoud is a creative writer with over 15 years of experience in journalism, translation, and investor relations. He has B.A in English and Literature from a reputable University. He recently became a contributor at Cryptolydian.com to fulfill his thirst in reporting digital coins and blockchain-related news, an interest was built over the years.

Recent Posts

The Most Important Things to Look Out for In Your Potential Crypto Broker

At its inception, cryptocurrency was traded solely through unique and dedicated cryptocurrency exchanges, or via…

7 months ago

Why ChainLink is the Hottest DeFi Coin Right Now

ChainLink (LINK) is a decentralised system that verifies real world data within blockchain-based smart contracts.…

7 months ago

KuCoin Hacker Moves $4.5M of Stolen XRP

KuCoin logo [...]

8 months ago

China Holds Half of Global Blockchain Patents in 2020

China has applied for 4,435 blockchain patents so far, accounting for about half of the…

8 months ago

Bahrain Allows UK’s Fasset to Test Blockchain-Based Solutions

Central Bank of Bahrain [...]

8 months ago