Crypto

Bitcoin Cash Halves Ahead of Bitcoin, Price Drops to $572

Bitcoin Cash undergoes 50% supply cut ahead of Bitcoin's halving, sparking debates on market impact and miner preparedness.

By Barry Stearns

4/3, 17:14 EDT
Bitcoin / U.S. dollar
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Key Takeaway

  • Bitcoin Cash undergoes a 50% reduction in new token supply, a precursor to Bitcoin's own halving event.
  • The price of Bitcoin Cash fell 10% to $572 following the halving, significantly below its all-time high of $4,355.
  • Historically, such halvings have led to market booms due to the reduced coin supply.

Bitcoin Cash Halving Precedes Bitcoin's

In a significant event that precedes Bitcoin's much-anticipated halving, Bitcoin Cash, a derivative of Bitcoin, underwent its own supply reduction. This event saw the supply of newly minted tokens cut by 50% on Wednesday. Originating from a split in 2017, Bitcoin Cash has been a part of the broader forking trend within the cryptocurrency space. Despite its notable backing by figures such as Roger Ver, the cryptocurrency experienced a 10% drop in price to $572, a stark contrast to its 2017 peak of approximately $4,355.

The Mechanics and Impact of Halving

Bitcoin's upcoming halving is set to reduce the reward for mining new blocks by half, a mechanism designed to control the supply of the cryptocurrency and potentially influence its price. Historically, halvings have been associated with bullish market trends, with Bitcoin reaching new highs following past events. The process, deeply embedded in Bitcoin's code, aims to limit the total supply to 21 million coins, presenting a deflationary contrast to fiat currencies. This year's halving is expected to decrease the block reward from 6.25 to 3.125 bitcoins, amidst debates on its potential impact on the market.

Miners Brace for the Halving

The upcoming halving poses significant challenges and opportunities for Bitcoin miners. The reduction in block rewards necessitates greater efficiency and technological advancement, as evidenced by the transition from Antminer's S19s to the more powerful S21s. Larger mining companies, such as Marathon Digital Holdings, have been preparing for various post-halving scenarios, emphasizing the importance of efficient operations and forecasting. The halving's outcome on miners will largely depend on Bitcoin's price movements, with the potential for profitability if prices remain favorable.