With the Bitcoin halving fast approaching, more European miners are trying to prepare for a sharp rise in costs of producing Bitcoin. While the cryptocurrency has reacted positively to the event, miners have their hands full as they strategize for the times to come.
With the coronavirus pandemic causing significant disarray in different markets, sceptics worry about the ability of miners to push against the higher costs of production and lower rewards that they will face following the halving event.
Meanwhile, Chinese miners appear more confident in the future. An early Chinese Bitcoin miner, Bixit, is set to invest $66 million worth of Bitcoin in a new fund of funds. It aims to invest in quantitative trading funds with strategies based on arbitrage, bitcoin futures contracts, and trend analysis.
Miners in regions with lower costs of production may find themselves with different factors to consider for their operations after the halving event. Countries (such as Venezuela and China) with subsidized electricity and low electricity prices are better able to manage the higher costs of production miners are subject to after Bitcoin halving.
WIth the highest electricity prices in the world, many miners in Europe may have to shut down their operations if costs of production get too high for them.
Equities markets continue to bleed profusely as economic circumstances surrounding the coronavirus pandemic continue to deteriorate.
For now, the stock markets such as those in Europe have had to rely on a rise in Chinese exports to soften the blow of falling demand for stocks. Activities in the region of Asia continue to shape global events. According to reports, corroborating evidence exists to prove that people in Asia pay more for Bitcoin than anywhere else in the world.
News & World Report senior investing reporter John Divine says,
“Previous halvings, in 2012 and 2016, respectively, were followed by huge run-ups in the price of bitcoin; halvings are fundamentally bullish for the cryptocurrency and another long-term rally could follow this next one. “