Marathon CEO doubts massive bitcoin rally post-halving

What’s new? The CEO of the largest US bitcoin mining company Marathon Digital, Fred Thiel, does not expect a large-scale rally of the first cryptocurrency after the April 20 halving, as this event is already partially accounted for in the price. In his view, the launch of spot bitcoin exchange-traded funds (ETFs) in the United States on January 11, followed by a massive inflow of institutional capital into the asset, accelerated the onset of a rally that historically has been seen only three to six months after the halving.

Bloomberg’s material

Halving is code’s embedded cut in half of the reward to miners for a mined block on the blockchain, which occurs approximately every four years. Initially, miners received 50 BTC; on November 28, 2012, the number dropped to 25 BTC, on July 9, 2016, to 12,5 BTC, and on May 11, 2020, to 6,25 BTC. In April 2024, the award will be cut to 3,125 BTC

What else is known? Thiel believes the launch of the ETF has already generated significant demand for bitcoin, as fund issuers have been buying up the asset in large volumes on behalf of share holders. Since the start of trading, cumulative inflows into nine new US bitcoin funds have totaled $28,388 billion, with $35,99 billion worth of BTC under management.

The figure does not take into account the GBTC fund from Grayscale, which until January 11 functioned as a bitcoin trust without the ability to redeem shares, and after conversion to an ETF began charging a fee of 1,5%, which is significantly higher than its competitors. These factors combined have led to outflows from GBTC, which have already approached $16 billion. The rest of the funds are showing positive performance.

Analyst Kevin Svenson: BTC could hit an all-time high on April 20

The expert believes that the rally of the first cryptocurrency may coincide with halving

Read more

Marathon CEO also noted that halving will reduce the number of new bitcoins coming into circulation to 450 per day, which will still have a small impact on the price.

Since the beginning of the year, the BTC exchange rate has risen by 61%, largely fueled by the hype surrounding bitcoin funds. On March 14, bitcoin hit an all-time high above $73 500, the previous high was set on November 9, 2021 at $69 000. However, the rate has now corrected to $68 025. That said, in previous market cycles, bitcoin prices did not start to rise until several months after the halving.

Earlier, Hashlab Mining analyst Jaran Mellerud noted that BTC ETF issuers buy an average of 2450 coins per day, while only 900 coins are issued during the same time. After halving the daily issuance, as well as remuneration to miners, will be halved, which will cause a large-scale price increase in the conditions of high demand and low supply, the expert believes.

Fred Thiel estimated that after the halving, Marathon’s costs per bitcoin should not exceed $46 000 for the company to remain profitable. He noted that miners make the most of the current environment because the bitcoin exchange rate “for once prices have not declined prior to the halving rather prices have gone up.”

Last December, Marathon set a record for monthly mining volume among publicly traded mining companies with 1853 BTC; in February this year, the company launched the Anduro network based on the Bitcoin blockchain.