Bitcoin’s mining difficulty and price recently reached new highs, coinciding with the anticipation for the upcoming Bitcoin halving in mid-April. Industry analysts, including Basile Maire of D8X, believe that the halving's impact on supply and demand has not yet been fully accounted for in the market, suggesting a possible further increase in Bitcoin's price to as high as $100K. Additionally, the role of the U.S. presidential election and the influx of funds into U.S. spot Bitcoin ETFs, alongside Bitcoin's reduced supply due to halving, paint a bullish outlook for Bitcoin's near future.
Historic Highs for Bitcoin Mining Difficulty
Bitcoin's mining difficulty and price both soared to new heights recently. On Mar. 14, the mining difficulty hit a record 83.95 trillion hashes, a 5.8% increase from the previous level of 79.35 trillion that was recorded on Feb. 29. This surge in difficulty, which measures the challenge of mining Bitcoin, corresponds with the crypto king hitting a new all-time high price of $73,835.
Over the past 24 hours of trading, the price of BTC fell by about 6.8%. As a result, the market leader was worth about $68,321.86 at press time.
The difficulty adjustment, which reflects the competitive nature of mining as more miners join the network, was calculated at a rate of 613.94 exahashes per second (EH/s), slightly up from the last cycle's 602.14 EH/s. This uptick in mining difficulty comes amidst a broader trend of increasing Bitcoin prices and mining rewards, with miners reaping a record $78.89 million in rewards on Mar. 11, surpassing the previous high set in October of 2021.
These milestones are happening as the crypto community is gearing up for the next Bitcoin halving in mid-April. The halving event, which reduces the block reward for miners by half, is seen as a pivotal moment that could influence Bitcoin's value and mining dynamics. Historically, halvings have been followed by big price increases, a pattern that many people now hope will continue.
Many analysts attribute the bullish trend in the price of Bitcoin to the upcoming halving. Only time will tell what the halving’s impact will be on Bitcoin's ecosystem and its position as the leading crypto in the market.
Halving Effect Underestimated
In a recent interview, Basile Maire, co-founder of the D8X decentralized exchange and former UBS executive director, called the upcoming Bitcoin halving a major, yet still underappreciated, market event. Scheduled approximately 34 days from now, the halving will slash Bitcoin's block reward from 6.25 BTC to 3.125 BTC.
Despite Bitcoin's recent price surge past the $71,000 mark, Maire believes the market has yet to fully price in the implications of the reduced supply issuance. He pointed to basic economic principles of supply and demand to suggest that prices are likely to climb even more.
Futures data also appears to back the sentiment of an upward trajectory, with expectations for Bitcoin to reach between $80,000 and $100,000. Maire has his eye on the $100,000 mark.
The role of the upcoming U.S. presidential election in shaping market dynamics was also discussed. Maire expects the election to act as a catalyst for positive market movements, boosted by efforts to stabilize traditional markets which, in turn, benefit the crypto sector. This relationship between traditional and crypto markets has certainly been strengthened by the introduction of exchange-traded funds (ETFs).
Adding to the positive momentum are the massive inflows into U.S. spot Bitcoin ETFs, which, according to Sergei Gorev, a risk manager at fintech platform YouHodler, are purchasing significantly more Bitcoin than the daily output from miners. Recent data shows these ETFs holding a staggering $60.5 billion in on-chain assets, with projections suggesting they could account for over 8% of Bitcoin's total supply absorption annually if the current trends continue like this.
This combination of factors—reduced Bitcoin supply due to the halving, anticipatory futures trading, broader economic and political influences, and big ETF inflows—paints a pretty bullish picture for Bitcoin's near future. However, the market's full response to the halving event remains to be seen.
Bitdeer Stands Out in Mining Sector
Bitdeer Technologies Group, a Bitcoin mining company spun off from the Chinese giant Bitmain, has caught the attention of investment banking firm Benchmark mostly due to its low operational costs and ambitious expansion plans. In a recent analysis, Benchmark initiated coverage of Bitdeer with a "buy" rating, pointing out its competitive advantage due to its low average power cost of approximately $0.04 per kilowatt hour, one of the lowest among its peers in the public trading space. This advantage is especially important in light of the upcoming Bitcoin halving.
The firm's expansion efforts, high levels of self-mining activity, and recent ventures into artificial intelligence are among the key factors contributing to Benchmark's optimistic outlook, setting a price target of $13 for Bitdeer shares, which currently trade at $6.46. Despite the broader market's cautious stance towards Bitcoin mining companies ahead of the halving, Bitdeer's strategic positioning and technological advancements, including the successful initial testing of a new energy-efficient mining chip, certainly shines some light on the company’s potential to stay competitive in a tightening market.
As shares of mining companies experience a downturn, with some well known firms like Marathon Digital and Riot Blockchain seeing major declines, the industry faces uncertainty. However, Bitdeer's market capitalization of around $768 million alongside Benchmark's confidence, suggests a very promising outlook for the company.
