- Jake Yocom-Piatt, the co-founder of Decred, believes the upcoming Bitcoin halving will have miners increasing prices.
- He observed that miners would be incentivized to double the price at which they sell Bitcoin to maintain the same profit margins.
Jake Yocom-Piatt, Decred co-founder and project lead, expects the upcoming reduction in Bitcoin’s mining payout will have miners increasing prices. According to a Cointelegraph report, Yocom-Piatt said:
Since the Bitcoin halving means that miners will receive half as many Bitcoins for the same amount of work, this doubles the unforgeable costliness of creating Bitcoin.
Miners’ costs are effectively fixed, so to maintain the same profit margins, they are incentivized to double the price at which they sell their Bitcoin. I expect this supply shock will drive the Bitcoin price up by moving offers from miners up substantially.
Once every four years and 210,000 blocks, Bitcoin undergoes a halving event which cuts the mining block reward in half. Based on current block production rates, roughly every ten minutes, a miner finds a block on Bitcoin’s network and receives a reward of 12.5 BTC. On May 11, that reward plummets to 6.25 BTC, thereby paying miners less for the same amount of work. Yocom-Piat believes that this will spike the price of Bitcoin.
In the short term, I expect the price to roughly double, but longer term predictions are difficult to make in the context of the boom-bust pattern of cryptocurrency markets. The stock-to-flow ratio is increasing substantially as a result of the halving, so that is good for the longer term price of Bitcoin.
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