Bitcoin halving is expected to hurt miners in the short term
The annual event usually results in a boost for the cryptocurrency in the long term
The amount rewarded to miners for Bitcoin is going to be reduced by an annual technical event called "halving" on Tuesday, and the impact of the latest cut has somewhat divided the community.
It is possible that the cryptocurrency will be better in the long term, but there are concerns that Bitcoin miners will be facing a serious, immediate hit.
The halving of Bitcoin is an event where the block reward for mining new Bitcoin reduces by half and miners receive 50% less for every transaction they verify. It happens every 210,000 blocks, which equates to roughly once every four years.
If there is a bump in the next few years the mining operation could become more profitable once again, but the fear is it will be too far away from many small and medium-sized Bitcoin mining operations that might be forced to shut down as a result.
As the cost of producing Bitcoin continues to rise, the majority of small miners may be forced to sell off their equipment and also their Bitcoins, potentially at a loss.
"With high costs comes the pressure to sell off a miner's BTC inventory since power expenses must be paid in fiat," Nathan Nichols, a managing partner at Imperium Investments told Finance Magnates.
With every halving of Bitcoin, there seems to be a delayed spike in the following years which has convinced a number within the community that something similar will happen this time around, with lofty predictions for 2022.
"Bitcoin always goes 10X (or more) in max 4 years. And it doesn't matter where you start on the chart; the 10X always happened in max 4 years," Twitter users Bit Harrington posted. "That's a cool fact (and '4 years' is important since the halving is every 4 years). If this pattern repeats we will see - 200K before 2022."
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