How will the upcoming Bitcoin halving impact miners and the cryptocurrency market? It’s all about energy efficiency strategies, global mining shifts, market reactions, and the potential long-term effects on Bitcoin’s value and mining landscape.
Bitcoin 20224 halving and its impact
The Bitcoin community is on the brink of a major event – the upcoming Bitcoin 2024 halving.
This anticipated event, occurring every four years, is expected to have significant implications for the market and miners, particularly those based in the United States.
The biggest #bitcoin mining countries are: 1) The United States 🇺🇸(40%) 2) China 🇨🇳(15%) 3) Russia 🇷🇺(12%)
This map will look very different in 1-2 years as miners in Africa and Latin America expand operations.#Bitcoin mining ⛏️ rigs will ruthlessly hunt down the cheapest… pic.twitter.com/KD50g9mWHe
As we approach this pivotal moment, set for April, the mining landscape is bracing for change, with the reward for mining Bitcoin transactions set to decrease from 6.25 BTC to 3.125 BTC.
This reduction in mining rewards will challenge operations globally, but the impact will vary significantly based on regional factors and operational efficiencies.
In the United States, where recent data from Hashlabs Mining indicates that 40% of Bitcoin mining takes place, the focus has turned towards energy-efficient mining operations. These operations are believed to be less susceptible to the adverse effects of the halving due to their lower operational costs.
The halving is not just a technical adjustment; it serves as a crucial test for the sustainability and profitability of mining activities.
This situation sets the stage for a broader discussion on the future of Bitcoin mining in the U.S. and globally as miners scramble to adapt to the impending reduction in rewards.
What is the Bitcoin halving?
The Bitcoin halving is a major event. It happens every four years.
In April 2024, the reward for mining Bitcoin will be cut in half. This means Bitcoin miners will get less Bitcoin for their work.
Why does this matter?
It affects how much money miners make.
When rewards drop, some miners might stop mining because it’s too expensive. This is especially true for those who use a lot of energy.
But it’s not all bad. The halving can make Bitcoin more rare. This can increase its value. People are watching to see how this changes Bitcoin’s price.
In the U.S., many miners are preparing. They are using less energy to stay profitable. This is important because the U.S. has a lot of Bitcoin miners.
The halving tests miners. It shows who can adapt and who can’t. This event is big for Bitcoin’s future. It could change how people see and use Bitcoin.
U.S. miners’ strategies for becoming more energy efficient
As the U.S. miners are getting ready for the halving, they focus on using less energy. This can help them stay profitable even when mining rewards are cut.
Energy costs matter a lot. Cheap energy means lower costs and greater profits. This is key for making money after the Bitcoin halving.
Some miners plan ahead. They look for ways to cut energy costs. They have mining sites all over the world. They share their energy costs to stay open about their spending.
The price of Bitcoin is also important. If it stays the same, some U.S. miners might reduce their mining. This is because they will earn less Bitcoin for the same work.
But, if Bitcoin’s price goes up, miners could still do well. Higher prices mean more money for the same amount of Bitcoin.
Navigating post-halving challenges
As the halving approaches, the future of Bitcoin mining hangs in the balance. Miners around the world are bracing for change, with energy efficiency becoming the mantra for survival. Those who have prepared by reducing costs and enhancing efficiency stand the best chance of weathering the storm.
The halving could lead to a shakeout, where only the most efficient miners remain. This is not necessarily bad; it could lead to a more sustainable and robust mining ecosystem. Efficiency gains could offset the reduction in rewards, maintaining the health of the Bitcoin network.
The global hash rate, despite potential short-term dips, is expected to continue its upward trajectory. This reflects confidence in Bitcoin’s long-term value and the mining industry’s resilience. New technologies and mining strategies will likely emerge, driving further innovation in the sector.
The price of Bitcoin remains a wildcard. A significant increase could rejuvenate the mining landscape, compensating for the halved rewards. Conversely, if prices remain stagnant or fall, the industry could face further consolidation.
Anticipating the Bitcoin market post-halving
The Bitcoin halving event sparks widespread speculation about future price movements.
Historically, halvings have been followed by significant price increases, fueling optimism among investors. As the supply of new Bitcoins decreases, if demand remains the same or increases, the price could rise.
Currently, Bitcoin’s price is experiencing a notable upsurge, partly driven by the anticipation of the halving.
Investors are keenly observing market trends, with many expecting the price to reach new heights post-halving. This optimism is bolstered by recent rallies and the introduction of Bitcoin ETFs (exchange-traded funds), which have attracted new investors.
However, the market is complex and not immune to downturns. High leverage and speculative trading could lead to volatility and corrections. Analysts advise caution, suggesting that while the outlook is promising, the market may still experience swings.
The post-halving period is a time of uncertainty and opportunity. Market dynamics post-halving will be influenced by a mix of investor sentiment, market liquidity, and broader economic factors.
As always, investors should conduct thorough research and consider multiple perspectives before making decisions. The halving could be a catalyst for growth, but the path is unlikely to be smooth.
In conclusion, the upcoming Bitcoin halving presents both challenges and opportunities. Miners must adapt to survive, while investors watch closely as this event could herald a new era for Bitcoin’s value and its underlying technology.
The next few months will be critical in shaping the future of Bitcoin mining and the cryptocurrency market at large.
Are you planning on buying a car with Bitcoin? Cryptocurrency is now used to buy real-world assets such as cars and even real estate. While this payment method isn’t accepted worldwide, more and more services are starting to consider it. And car dealerships are no exception.
In 2021, Tesla’s CEO, Elon Musk, announced that it would accept Dogecoin as payment for Tesla. Meanwhile, the offer is no longer standing, but that doesn’t mean you can’t use Bitcoin to buy a car in 2023.
Is it legal to buy a car with Bitcoin?
Yes, it is indeed legal to purchase a car using Bitcoin. You can also use other popular cryptocurrencies, such as Dogecoin and Shiba Inu. However, similar to any other online transaction, it is important to exercise caution and adopt certain safe practices.
The first thing you need is to find a reputable car dealership that accepts Bitcoin as a payment method.
You can do this by checking out reviews on third-party consumer forums to discover the best places to purchase cars with cryptocurrencies. Platforms such as Crypto Emporium and BitCars have supported crypto payments for some years now and have excellent reputations in the market.
One of the advantages of using cryptocurrencies like Bitcoin for transactions is that they are generally secure. This means that you do not need to disclose any personal financial information, as transactions take place directly between two digital wallets. This method of payment contributes to your safety and security during the transaction.
While there is no car manufacturer that accepts cryptocurrency throughout their distribution network as a whole, there are specific car dealerships that have implemented cryptocurrency payment services to serve customers who wish to complete their purchases using digital assets.
In the end, it’s up to you to find a platform that allows crypto payments for products such as cars. Some of the most popular options for such purchases include:
One of the most popular payment services is BitPay, which is already used by some Lamborghini and BMW dealerships thought Europe, the UK and the USA.
Finding out if a car dealership accepts Bitcoin or other cryptocurrencies is simple. The quickest way is to call local dealerships and ask. Salespeople might need to check with management, but they should give you an answer soon.
You can also look at car dealership websites to see if they accept Bitcoin. However, these sites mainly focus on selling cars and might not clearly mention payment methods, so it could be a bit frustrating unless the dealership prominently displays this option.
How to buy a car with Bitcoin (or any other cryptocurrency)
Buying a car with cryptocurrency can be done from a dealer that accepts it or from a private seller who is comfortable with crypto. Usually, dealing with a dealer is easier. Here’s a simplified plan:
Find out which dealerships accept cryptocurrency.
Research different cryptocurrency exchange apps and learn how they work. The dealer might prefer a certain app like BitPay. Depending on the payment processor, you might need to set up an account.
Confirm that the dealer accepts the cryptocurrency you own. Bitcoin is one of the most commonly accepted.
Choose the car you want to buy.
Follow the dealership’s instructions for the exchange.
What’s the advantage of buying a car with Bitcoin?
There are several reasons why some crypto investors prefer to use Bitcoin to buy a car:
Fast Payments. Bitcoin transactions are usually faster than traditional fiat payments. Traditional payments rely on bank transfers or credit/debit cards, which require multiple intermediaries for processing. In contrast, Bitcoin transactions are decentralised and don’t involve intermediaries, allowing for quicker transactions that often take only a few minutes.
Highly Secure Payments. Bitcoin transactions use advanced encryption techniques, making them highly secure. They are recorded on a public ledger called the blockchain, which is virtually impossible to counterfeit or alter. Once a transaction is recorded on the blockchain, it can’t be amended or deleted. This immutability makes all transactions permanent and tamper-proof, hindering anyone from manipulating network records.
Lower Transaction Fees.Bitcoin transactions typically have lower fees than traditional payment methods such as credit cards or wire transfers. This advantage becomes especially significant for international transactions, where traditional remittance fees can be high. Crypto transactions could potentially eliminate 97% of these fees, making large, cross-border transfers more cost-effective.
No Transaction Limits. When purchasing a car with Bitcoin, you don’t need to worry about transaction limits. This is important when making big purchases like cars. Credit card companies and banks may decline a purchase exceeding a certain amount, but cryptocurrencies have no such limitations. This ensures that the transaction proceeds without any delays.
Should you buy a car with Bitcoin?
Whether or not you should buy a car using Bitcoin greatly depends on your comfort level with risk and volatility.
Cryptocurrencies, including Bitcoin, are known for their dramatic price swings.
Take, for example, Bitcoin’s performance in November 2021, when it reached a high of nearly $69,000. At that point, you could have purchased a new Porsche 718 Cayman with just one Bitcoin. Fast forward to the present, Bitcoin’s value is around $17,000, so the same Bitcoin would only be enough to buy an average city car.
The value of cars doesn’t fluctuate as significantly as cryptocurrencies, which makes this kind of transaction risky. However, a workaround for this volatility could be to use stablecoins, which are cryptocurrencies designed to maintain a stable value relative to a specific asset or a pool of assets. A good example is the USDC or USDT, which you can store in a crypto wallet and use for car payments, thus mitigating the risk of your crypto’s value suddenly dropping.
That being said, if you are a firm believer in the future of cryptocurrencies and their potential to revolutionise our financial system, buying a car with Bitcoin could be an exciting way to apply this innovative technology. Plus, there is a certain novelty factor in being able to tell your friends that you bought a car using Bitcoin.
Ultimately, the decision to buy a car with Bitcoin should be based on your personal financial situation, your tolerance for risk, and your belief in the future of cryptocurrencies.
Small-time investors have the opportunity to realize their dreams of owning at minimum 1 Bitcoin, with BTC trading in the $20,000 area for the first time since 2020.
Bitcoin trading in the $20k range
Investors around the world have been chasing one of the total 21 million BTC since the early days of Bitcoin (BTC). This massive hysteria has been caused by the phenomenal interest in the cryptocurrency and the widespread acceptance of the internet in the last few years.
After hitting another all-time high in November 2021, when bitcoin’s price reached almost $69,000, the leading cryptocurrency has been declining in value ever since. In May 2022, the bear market has been confirmed, and it involves not only the cryptocurrency market, but the most important financial markets. The crypto market is now more tied to the stock market than ever, as more institutional investors have joined in 2021.
While many online celebrities have been raising concerns and painting a gloomy future for bitcoin, some see it as an opportunity to become a bitcoin owner.
BTC trading in the $20,000 area for the first time since 2020 gives small-time investors the opportunity to realize their goal of owning a minimum of 1 BTC. According to Glassnode, there has been a significant increase in the total number of Bitcoin addresses containing 1 BTC or more. These have increased by over 13,000 in June.
The total number of addresses that hold 1 BTC has seen an immediate decrease in the days ahead, but the Reddit crypto community continues to welcome new crypto investors who have worked hard to become wholecoiners.
New investors become wholecoiners
Some Reddit users even share their stories about how they saved enough to accumulate 1BTC and share screenshots of their achievements.
This Reddit user, arbalest_22 said that he spent approximately $35,000 to accumulate 1 BTC. He continues to support the Bitcoin ecosystem by pledging to procure Satoshis and sats until his total of 2 BTC. The ultimate goal of this user, and those who contributed to the discussion is to have tax-free income.
Other users say that they were able to become wholesalers by using the dollar-cost-average strategy. This dollar-cost-averaging (DCA) requires investors to regularly buy smaller amounts of BTC over a longer time.
According to Glassnode data, the total number of Bitcoin wallet addresses that hold more than 1 BTC increased is around 800,000.
Although falling BTC prices can be seen as an opportunity for investment, Google search trends highlight the tendency of other investors to speculate about its future.
Is it time to buy the Bitcoin dip?
After weeks of unrelenting selloffs, the Google search results show that cryptocurrency markets are experiencing peak anxiety.
After the comments of the United States Federal Reserve on the inflation outlook, nerves were high in crypto markets. The sell-off began at the beginning of June 2022.
Bitcoin lost the $20,000 psychologically significant mark. It also crosses another negative milestone, as it kept falling below the previous halving cycle’s highest for the first time ever in its history.
BTC/USD suffered 37% losses in the first two weeks, making June 2022 the worst month for Bitcoin.
The pair has traded almost 60% lower year-to-date. This is 70% less than the record high of $69,000 set in November last year.
According to cryptocurrency analysts, Bitcoin needs a higher volume and volatility to match volume levels from previous bear market bottoms, at the 200 MA (200-week moving average), a key lifelong support line.
The US stock market seems to recover and the S&P had its second-best week of 2022, which indicates a modest relief across risk assets. Everyone is looking at Bitcoin’s 200-week MA, which is the major indicator that gives the average price of Bitcoin over the last 200 weeks, hoping to surpass this support lever soon.
On March 14, the European Parliament discussed the effects and carbon footprint of Proof-of-Work cryptocurrencies. The EU Bitcoin ban was not passed, but the energy discussion has not ended.
A rule proposal that would have effectively banned Bitcoin in the European Union (EU) has been struck down.
The European Parliament’s Committee on Economic and Monetary Affairs (ECON) voted to keep the provision out of a draft Markets In Crypto Assets (MiCA) framework. This is the EU’s comprehensive regulatory package that governs digital assets.
EU’s response to crypto companies: MiCA
The MiCA framework was introduced by the European Commission in September 2020, as the EU executive branch responsible for proposing and enforcing laws. It is part of a larger digital finance strategy to adapt Europe to the digital age. It’s also quite different from other regulatory efforts.
For instance, the U.S. has introduced many bills over the years that directly impact the crypto space. These include tax and securities laws, but different states may have their own regulatory requirements. The country does not have a comprehensive equivalent to the EU’s MiCA. In August, the country’s most comprehensive bill regarding crypto regulation was presented. China had already banned crypto trading and mining in 2021. However, it was still working on its own digital currency, the digital yuan.
MiCA covers cryptocurrencies such as Bitcoin and Ether, as well as stablecoins. The proposed framework does not cover digital currencies issued by central banks (CBDCs), nor crypto assets like security tokens, which might be considered financial instruments such as securities, deposits or treasury bills.
Although the promise of a passportable license to crypto asset service providers sounds appealing for established crypto firms that want to establish in the region, industry participants are concerned about the impact MiCA may have on the EU’s digital asset market.
EU’s Parliament voted on the crypto proposal
This Bitcoin ban proposal was added to the draft last Wednesday. It sought to limit cryptocurrencies powered using an energy-intensive computing process called proof-of-work (PoW). The proposal was met with heavy opposition by crypto advocates around the world.
After the Bitcoin ban was opposed by the committee, Stefan Berger, member of the EU Parliament, and rapporteur for MiCA, tweeted: “ECON committee approved my #MiCA report. A good day for the crypto sector! The EU Parliament has paved the way for innovation-friendly crypto regulation that can set standards worldwide. The process is not over yet; Steps still lie ahead of us.”
ECON-Ausschuss hat meinen #MiCA-Bericht angenommen. Ein guter Tag für den Krypto-Sektor! Das EU-Parlament hat den Weg geebnet für eine innovationsfreundliche Krypto-Regulierung, die weltweit Maßstäbe setzen kann. Der Prozess ist noch nicht vorbei; Schritte liegen noch vor uns /1
The vote on the provision, commonly known as the Bitcoin ban, was close, and a small majority could defeat it. The proposal required that all cryptocurrencies be subject to the EU’s “minimum environmental sustainability standard with respect to their consensus mechanism.”
The rule suggested a phase-out plan for popular proof-of-work (PoW) cryptocurrencies such as Bitcoin and Ether that would allow them to switch their consensus mechanism to less energy-intensive methods like proof-of-stake (PoS).
While plans are in place to make Ethereum a proof-of-stake (PoS) consensus system this year, it is not clear if the same will be possible for Bitcoin.
The MiCA draft will be subject to a “trilogue” after the vote of the Parliament. This is a formal round between the European Parliament, Commission and Council.
Can renewable energy sources save Bitcoin?
Experts in renewable energy see two possible ways that crypto can be used to address power consumption concerns, first, by increasing demand for renewable energy sources. Second, by using blockchain technology to interact transparently and transparently with power grids in an auditable and measurable manner.
A small majority of members of the monetary committee voted for a compromise calling on the European Commission to propose alternative regulations. This is the EU’s executive arm that proposes new legislation.
“By January 1 2025, the Commission shall present to the European Parliament and to the Council, as appropriate, a legislative proposal to amend Regulation (EU) 2020/852, in accordance with Article 10 of that Regulation, with a view to including in the EU sustainable finance taxonomy any crypto-asset mining activities that contribute substantially to climate change mitigation and adaptation.”
Some politicians and regulators around the globe have criticized proof-of-work for their concerns about energy. EU leaders are worried that renewable energy could be used to sustain cryptocurrencies such as bitcoin, instead of being used for national purposes.
As another week goes by, countless billions were created into the US financial system by its own central bank. According to the WSJ the FED added another $57.5 billion in temporary liquidity into financial markets.
The central bank started interfering in markets since September and intends to boost repurchase operations within the vacation period. More than double the recent Bitcoin market capitalization is going to be pumped back into the market by the FED.
The additional $425 billion is a part of continuing quantitative easing programs and the bank stated that it is ‘perfectly normal’. Printing countless dollars to prop up lending markets isn’t normal by any criteria and illustrates the flaws of the fiscal system.
According to usdebtclock.org, the federal debts are of over $23 trillion, but even so, banks have been encouraging taking credits in the market.
Crypto business analyst ‘PlanB’ compared this to the Bitcoin stock to flow model, which is much smaller compared to the trillions of dollars which were printed over the past ten years.
“You think bitcoin stock-to-flow model predictions are unrealistic, flawed, absurd? I think negative interest rates & quantitative easing are absurd, printing $21 trillion out of thin air since 2008,”
A recent report by RT stated that the US government could have misspent an identical sum as the ineptitude escalates. Two divisions may have spent up to $21 trillion on matters they can not account for between 1998 and 2015.
You think #bitcoin stock-to-flow model predictions are unrealistic, flawed, absurd?
I think negative interest rates & quantitative easing are absurd, printing $21 trillion out of thin air since 2008: 99.99% went to bonds, stocks and real estate, only 0.01% to bitcoin. #QEternitypic.twitter.com/EOwM0GTtTY
Bitcoin has a fixed total supply and its fixed inflationary rates are a mathematically way to solve the monetary madness that’s presently being orchestrated by global banks.
These banks brought on the 2008 financial catastrophe and they’ll cause the subsequent one that could be imminent if present trends persist.
“Companies are buying back their own shares with that money. CEO’s of those companies are getting richer and richer and have few other options than to put their money in real estate.”
The main point is that you can not print Bitcoin! More individuals are starting to realize this. BTC is the greatest hedge for anyone desiring a parachute once the monetary walls come crumbling down.
Ever since Bitcoin first was created, 11 years ago, the community around it grew and for the past few years, everyone started talking about mass adoption. But before even thinking about Bitcoin replacing cash and traditional fiat, we need to overcome the handicap we are facing right now and answer the question: Why don’t people pay with Bitcoin?
Probably one of the main reasons nobody spends Bitcoin is because nobody earns Bitcoin on a regular basis. If this ever changes then we can expect a whole lot more stream. It isn’t ideal to purchase Bitcoin and then to use it to buy something else. But for those who have it coming in their wallet each week, the mindset is different.
What are the reasons people refuse to use Bitcoin for everyday payments? Why don’t people pay with Bitcoin?
Tax And Regulations
Why don’t people pay with Bitcoin? There’s no denying that taxation issues aren’t helping with the Bitcoin mass adoption.
As a normal consumer and taxpayer, why would an individual want to complicate his or her life with paying tax for cryptocurrency, when they have a complicated enough life as it is? Most won’t bother.
The taxation of Bitcoin has another major issue – Bitcoin’s volatility. To understand how volatility can affect a Bitcoin holder, consider this: An individual can purchase 0.1 BTC when the price of Bitcoin is $10000 and then trade it a number of times, ending with a net profit of 0.005 BTC by the end of the year. This concludes that your total amount of Bitcoin is 0.015 BTC. But consider that the current price of Bitcoin is $6000. So even with an increase in the amount of BTC, there is still a cut from the initial price and since the tax needs to be paid in USD, it boils down to whether declare this situation a reduction or a profit. This case needs to be clearly defined if there will be voluntary compliance.
Most Bitcoin owners are confused about the regulations are believe it is unfair to pay double taxation. VAT is a widely applied outside the US and it already represents a tax and paying yet another tax just because something is being bought with Bitcoin would result in double taxation.
On top of that, it wouldn’t be realistic to assume that the authorities and the financial institutions will simplify the tax collecting procedure while they haven’t sorted out what’s the best way to tax Bitcoin, in the first place. And this leads to another point, regulation of Bitcoin. Regulating Bitcoin will take a great deal of time.
And regulation needs to be comprehensible by most individuals. Paying tax for something that was created to avoid this old system in the first place, is not something most accept and for good reason. People don’t like paying taxes if they don’t understand where their taxes are going or doing for them.
Can paying taxes be avoided? Yes.
But taxes are not a problem for those using services which don’t send out tax reports for purchases made with Bitcoin, such as BitRefill, eGifter and OverStock. Many use such services to purchase good using Bitcoin while paying not paying taxes for the cryptocurrency spent.
Hoarding coins
Why don’t people pay with Bitcoin? There are certainly lots of reasons why ordinary consumers don’t use Bitcoin to pay for services or products.
We must bear in mind that the image of Bitcoin that was portrayed since 2018 throughout financial debates is not reflecting the entire picture and it is starting to fade. Obviously, one major reason behind the adoption problem is that many retailers lack cryptocurrency payments because they are only holding crypto in for that potential bull run. And we might not really blame these individuals since for certain Bitcoin is a fantastic digital advantage to hold as an investment.
The crypto community tends to agree on the fact that the big majority aren’t spending their Bitcoin because they are hoarding their coins. That’s why it is expected to see a higher volume of trades when the Bitcoin price goes up, as many are waiting to cash in on their profits.
In the speculative market we have today, holding your Bitcoin for better days is what most seem to be doing. It is simply too risky to pay with Bitcoin and to precious to sell it.
To put in a simple sentence, the answer to “Why don’t people pay with Bitcoin?” is “Because people don’t earn simply Bitcoin, they don’t understand regulation and taxation and see it way too risky due to the speculative market.”
