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Bitcoin halving: How will crypto miners be affected?

Investors are anticipating the bitcoin (BTC-USD) halving event in the near future, as soon as this weekend. The price of bitcoin has retreated from its recent highs and is currently trading above $64,000 as of Friday. During this event, the reward for mining new bitcoin blocks is cut in half, slowing down the rate at which new bitcoins are introduced into circulation.

Yahoo Finance's Julie Hyman and Madison Mills break down the details, providing insights into the implications for bitcoin miners' profit margins.

Want to learn more about the bitcoin halving? Watch this video from Yahoo Finance for a quick explainer: Bitcoin halving: Explained

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

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This post was written by Angel Smith

Video transcript

MADISON MILLS: Now Bitcoin's halving event is expected to happen this weekend. The event will cut the amount of new Bitcoin available on a daily basis in half, a blow for mining companies. Bitcoin's price right now hovering right around the 64,000 mark but up nearly a percentage point on the day here.

But, Julie, this morning, we had CleanSpark's CEO on our earlier programs telling our colleagues that this macro reaction is happening because of the macro here. But the bounce back is also becoming amidst those net outflows that we're seeing at Grayscale. I know you're so familiar in this space.

Those record outflows hitting $1.6 billion today, down 50% since the open. He said that that's not only impacting Bitcoin but also impacting these mining companies. So I'm curious to see whether or not this halving event has a similar impact to what we've seen in terms of the outflows at Grayscale, or if it's a nothing burger for the miners and they've already priced it in.

JULIE HYMAN: I-- it's hard to tell what is going to happen. I mean, you're talking about effectively that the reward they get per Bitcoin is going in half. So, like, they're doing exactly the same thing, and they're going to be making half what they did on that exact same thing.

So how-- I mean, you know, we talked with the Riot Blockchain CEO earlier in the week. Or was it last week? And he acknowledged that. And he said, but we're counting on the price going up over the long-term.

MADISON MILLS: Right.

JULIE HYMAN: And that's how you make it back. And historically, that is what has happened after halving. So that sometimes Bitcoin falls in the short-term. Sometimes it rises. But in the longer term, a year from halving, Bitcoin has historically been up. So that's what they're betting on, and that's what Bitcoin investors are betting on. But, you know, past history is no guarantee of future results. So that's what has tended to happen. Will it happen again? We'll see.

MADISON MILLS: I mean, they've had four years to prepare. So maybe that has an impact--

JULIE HYMAN: Yeah.

MADISON MILLS: --on it, but it's a great point that I know a lot of your guests have mirrored, which is just they're going to stay in it no matter what. So whatever happens, whatever.

JULIE HYMAN: Yeah, as Michael Saylor said, whoever owns the most Bitcoin wins.