Bitcoin could see a wave of forced selling as miners face the reality of lower rewards after halving, research firm says

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• Bitcoin’s halving in April may force cryptocurrency miners to sell some tokens, Kaiko Research reported.

• The event has left miners with fewer rewards while operating costs remain high.

• These companies have not yet had to tap into their bitcoin reserves thanks to high transaction fees, but that could change.

Markets have long viewed bitcoin’s recent halving as a major price support, but second Kaiko research.

The April halving is a pre-coded event where the amount of bitcoin rewarded to cryptocurrency miners is halved. Last month’s halving was the fourth in 12 years and reduced daily token production from 900 to 450, Bloomberg reported.

While this drastic decrease in supply can increase the price of the token, it also adds considerable costs to mining operations.

Mining companies only receive bitcoin when they successfully complete a blockchain transaction, which is a resource-intensive process: with fewer bitcoins received to cover costs, halving tends to be a sell-off event for miners, Kaiko wrote .

So far, that hasn’t happened, as companies have instead relied on high transaction fees for funding – these are bitcoins given to miners for their transaction confirmation service. According to Bloomberg, fees have increased following the explosion of meme coin creation following the halving event.

For example, transaction fees made up 16% of bitcoin received by Marathon Digital in April, compared to 4.5% in March, Kaiko said, adding that “the recent drop in fees could lead to selling pressure from traders.” miner”.

Miners are often known for accumulating bitcoin treasures without selling, which analysts have previously pointed to as another supply constraint driving up prices.

“For example, Marathon Digital holds 17,631 BTC worth just over $1.1 billion, while Riot Platforms holds another 8,872 BTC worth over $500 million,” Kaiko wrote. “If miners were forced to sell even a fraction of their holdings in the next month, it would have a negative impact on the markets.

While Kaiko did not outline how this might affect the price of bitcoin, analyst Peter Brandt separately argued that bitcoin could drop to mid $30,000 in the post-halving environment.

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