Although Bitcoin was down over 13 percent to below $4800 today, hitting a fresh 13-month low, some crypto investors still hope the biggest cryptocurrency could reach its peak somewhere between $100k and $200k in 2020 when the Bitcoin reward halving takes place.
However, Mao Shixing, co-founder and CEO and of the world’s sixth largest bitcoin mining pool F2Pool, believes Bitcoin “halving” 2020 will have very little impact on the Bitcoin ecosystem.
“We mentally prepare ourselves for Bitcoin’s next halving, so the event is expected to have little impact on the the Bitcoin ecosystem;in addition, the nanometer-size chips used to mine cryptocurrencies will increase the life-cycle of mining rigs and the investment model of the mining machine will be different then.” Mao said in an interview with Chinese media outlet Jinse Finance.
The halving, a 50% reduction of block rewards on the Bitcoin blockchain, is only 18 months away. The reward for mining a new Bitcoin block will drop from 12.5 Bitcoin to 6.25 Bitcoin in May 2020. Since the original cryptocurrency’s creation in 2009, a Bitcoin halving is a fixed event and will occur every four years or after 210,000 blocks are mined, or confirmed. As the halving approaches, some people speculate that miners may continue to maintain or increase computing power because they expect future bitcoin price increases which is driven by retail investors’ FOMO (fear of missing out) to offset the reduced block reward.
Mao Shixing remains cautious over the investment returns on the mining in the near future. He added that “investment incomes from mining rigs will level out over time, and home appliances in the future are likely to be used to mine cryptos, which will lead to the dramatic increase of bitcoin miners and players in the bitcoin ecosystem will see an explosive growth.” But he did not predict where will the Bitcoin price head to before or after the halving event.
When asked about how could miners ‘turn adversity into opportunity’ during such turbulent times, Mao said the Bitcoin price’s monumental high last year stimulated a huge influx of new miners adding their computing power to the Bitcoin network which consumed more and more power. But in the bear market, the excessive use of energy and other resources will lead to a crisis.
“Miners need to control their own risks, and reduce the leverage. The critical thing is to survive. In the future, house appliances used to mine cryptocurrencies and mining equipment running on cloud computing and AI will be the directions for the space,” Mao said.
In August, he has published a list of minimum prices for profitable crypto mining, indicating that if Bitcoin price drops below 36,792 yuan or $5,376, then mining the cryptocurrency on Bitmain’s Antminer T9 would no longer be profitable. As of now, bitcoin price dropped far below $5376 and miners have suffered a big blow. Over the past 3 months, F2Pool has lost millions of yuan in the prolonged bear market. Currently, the mining pool is seeking to improve the technology to further reduce costs in a bid to survive the crypto winter.
*Edited based on an article from 8btc.