Crypto community is excited about the Bitcoin reward halving next month but interestingly bitcoin forks’ halving is here.

Bitcoin Core’s (BTC) fork Bitcoin Cash (BCH) and the latter’s fork Bitcoin SV (BSV) will go through their respective block reward halving on April 8 and April 9 next week.

Meanwhile, Bitcoin Cash has laid off 50% of its employees just days before its halving.

Both these Bitcoin’s forks will have their halving one month prior to bitcoin because of the very rapid block generation in Bitcoin Cash which started right after its fork in August 2017. However, the block production rate was later normalized with an update of the difficulty adjustment algorithm.

Now, these early halvings might have a “dramatic effect” on both BCH and BSV’s hash rate, according to Arcane Research. Currently, a vast majority of this hash rate share (94.8%) belongs to the world’s leading cryptocurrency and both BCH and BSV have a meager less than 3% share.

The halving event could be expected to have at least a temporary halving of the hash rate as the miners switch to mine BTC because mining Bitcoin will be more profitable than BCH and BSV.

Both the forks can capture the share only if their price or fees increases drastically or hash rate halves.

A decline in hash rate means both Bitcoin Cash and Bitcoin SV will be “drastically” more exposed for potential 51% attacks.

Things could change when Bitcoin halving occurs in mid-May, however, the effect on BTC would be “minuscule” because it already accounts for almost 95% of SHA-256 hash rate.

In its latest report, Coin Metrics also discusses the effect of halving and that,

“miners are a continuous and significant source of selling pressure that has a pro-cyclical impact on prices.”

Miner-led selling pressure for all three of the cryptocurrencies is currently high which is only expected to increase further as all of them undergo their halvings. This is because all three assets share the same SHA-256 mining algorithm and miners can “seamlessly” redirect their hash power to the digital asset that provides the highest return.

BCH and BSV halving will force miners to direct more hash power to Bitcoin which is expected to increase the difficulty and further squeeze profit miners for all miners. Coin Metrics states,

“We expect miners to follow a cycle of decreased profit margins, increased selling, capitulation, and a culling of the least efficient miners from the network.

Once this cycle is complete, the miner industry should return to a healthier state that is supportive of future price increases.”

At the time of writing, Bitcoin (BTC) has been trading at $6,750 BTC 0.01, Bitcoin Cash (BCH) at $235 BCH -2.28, and Bitcoin SV (BSV) at $177 BSV -1.90.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

364 +