The highly anticipated Bitcoin halving event took place late Friday night (US time), marking a significant milestone for the world’s largest cryptocurrency. This technical event, which occurs roughly every four years, cuts the reward given to Bitcoin miners in half, potentially setting the stage for a major rally in the price of Bitcoin.
According to CNBC, the halving has historically preceded significant bull runs, with Bitcoin touching new all-time highs after each event.
This time around, miners have had years to prepare for the halving by seeking lower power costs and upgrading their equipment to more efficient machines. As noted by CNBC, some miners, like Core Scientific and Bitdeer, have focused on vertical integration and diversifying their revenue streams beyond purely Bitcoin mining.
CNBC reports that the increased competition resulting from new miners entering the market has been cutting into profits in recent years. However, as their article points out, the introduction of U.S. spot bitcoin exchange-traded funds (ETFs) has significantly shifted the pricing dynamics. The news outlet points out that the price of Bitcoin had already surged to a new all-time high above $73,000 in March, ahead of the halving event.
Interestingly, CNBC mentions that the block reward is no longer the primary form of miner revenue. Recent programming innovations in Bitcoin have apparently given rise to a growing ecosystem of projects building on top of Bitcoin’s blockchain, translating to greater transaction fee revenue for miners. Bill Barhydt, CEO and founder of Abra, told CNBC that he believes transaction fees could peak within 24 months at ten times their cost during the previous cycle peak.
As the halving event unfolds, CNBC reports that some miners are also exploring opportunities in the rapidly growing field of artificial intelligence (AI). Digital asset fund manager CoinShares suggests that more miners may shift toward AI in energy-secure locations due to the potential for higher revenues. However, as noted by CNBC, pivoting from Bitcoin mining to AI is not a straightforward process, as it requires a distinct infrastructure and a different skill set among employees.
According to CNBC, several mining firms, including BitDigital, Hive, Hut 8, Terawulf, and Core Scientific, already have either current AI operations or AI growth plans. Core Scientific, for example, has partnered with CoreWeave, a cloud provider that supports machine learning use cases. CEO Adam Sullivan told CNBC that the combined capabilities will support both AI and High-Performance Compute workloads, with an estimated revenue of $100 million.
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