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Threat of Post-Halving Price Slump: Bitcoin Miners Hold $5 Billion in BTC, Ready to Sell

Potential impact of 2024 Bitcoin halving on miners’ selling strategy

Markus Thielen, head of research at 10x Research, predicts a considerable outflow of Bitcoin from miners following the halving, mirroring patterns observed in previous cycles. In an analyst note dated April 13, Thielen explained: 

“The overhang from this selling could last four to six months, explaining why Bitcoin might go sideways for the next few months — as it has done following past halvings.” 

This projection is based on the significant amount of Bitcoin that miners may need to liquidate to manage operational costs post-halving.

Thielen further noted the historical context, stating: 

"Bitcoin prices remained range-bound between $9,000 and $11,500 in the five months that followed the 2020 halving." 

Given this precedent, the market might not witness substantial price increases until around October, following the halving scheduled for April 20.

Strategic stockpiling and expected market movements

Ahead of the halving, miners have been accumulating Bitcoin, leading to a temporary supply/demand imbalance which has historically triggered price rallies. Thielen highlighted:

"This has already occurred with BTC prices surging 74% in 2024 to reach an all-time high of $73,734 on March 14 before correcting to below $63,000 in mid-April."

Looking at specific operations, Thielen cited Marathon, the world’s largest Bitcoin miner, which has reportedly built up a significant inventory. 

He estimated:

"Marathon (currently) produces 28-30 BTC per day, this could result in 133 days of additional supply hitting the market plus the BTC they produce, which would be 14-15 BTC per day after the halving," 

This strategy is likely to be mirrored by other miners, collectively contributing to a maximum of $104 million of BTC selling per day post-halving, potentially reversing the pre-halving rally.

Marathon CEO Peter Thiel recently commented on the firm’s strategy, asserting a break-even rate of about $46,000 per BTC to remain profitable post-halving. He suggested that significant price movements are unlikely in the six months following the event, reinforcing Thielen’s analysis.

Broader market implications and altcoin outlook

Thielen also touched on the potential repercussions for altcoins, which could disproportionately bear the impact of the post-halving adjustments. Many altcoins have receded significantly from their 2021 peaks and could remain subdued if Bitcoin’s market behavior serves as a leading indicator. 

He concluded:

"Even if there is a correlation between the halving and an altcoin rally, as some predict, historical evidence shows that the rally typically begins almost six months later," 

This in-depth analysis provides a comprehensive view of the expected market dynamics post-Bitcoin halving, preparing investors for a period of potential market stabilization and delayed rallies.