Bitcoin halved the third block reward in the early morning of this morning. Huobi University President Yu Jianing believes that in the short term, the direct effect of halving Bitcoin output is that the “mining” revenue will be reduced by half, and some old mining machines and non-professional mines with higher energy consumption will be phased out. However, the Bitcoin mining network has a self-adjusting mechanism, which will adjust the difficulty factor according to the change in “mining” computing power, thereby achieving a new balance. Bitcoin mining will move to a new stage of professionalization, refinement, and efficient operation. It is worth noting that the cost of mining is not the core factor that determines the price of the Bitcoin market. Only changes in market supply and demand affect market trends. Since the halving of Bitcoin production is a deterministic matter and can be fully expected, the short-term impact has been reflected in the price in advance.
In the long run, halving bitcoin production will continue to have an impact on market price movements in the next two to three years. The halving of production has reduced the new supply of Bitcoin and entered a more scarce stage. As “digital gold”, the long-term impact of scarcity is greater. Speculation is a short-term factor. The real future lies in the fact that various types of digital assets have become mainstream assets, and their actual use has emerged. Bitcoin as a general equivalent naturally rises, and the price of Bitcoin is actually a reflection of the overall supply and demand of digital assets. Bitcoin is also the “general equivalent” of various digital assets. In the long run, with the accelerated application of blockchain technology, the process of “digital assetization” and “asset digitization” has accelerated, and digital assets have become more popular worldwide. Therefore, this change in supply and demand will gradually emerge in the next two to three years.
