Fred Thiel, the CEO of Marathon Digital Holdings Inc., recently discussed the potential impact of Bitcoin’s halving on its market dynamics. In an interview with Bloomberg TV, Thiel expressed his belief that the halving may already be factored into the current price of Bitcoin. He suggested that the initial phase of the halving’s early adoption was the approval of Bitcoin ETFs, which attracted significant amounts of money into the market. Thiel argued that this influx of capital could have offset the typical price increase that occurs during halving events.
Thiel also highlighted the positive influence of ETFs on Bitcoin, noting that their approval increased demand and made the cryptocurrency more attractive. He acknowledged the importance of this policy in attracting much-needed capital inflows to the market. As the largest cryptocurrency miner in the United States, Marathon operates numerous mining operations across the country, including some in Texas.
The upcoming halving event, scheduled for the end of April, carries significant implications for mining companies like Marathon Digital Holdings. While the event will reduce mining rewards by half, it remains a positive factor for the company. Thiel explained that the halving would result in a decreasing supply of Bitcoin, with approximately 450 coins disappearing from circulation each day. While this may not have a significant impact on existing producers, Thiel remained optimistic about the event’s potential effects on the mining industry. He emphasized the difference between miners and their prices, which diverged from the trends observed in other sectors prior to halving events.
Bitcoin has not only maintained its value but has also experienced a substantial increase of up to 60% over the past year. The rise in Bitcoin’s popularity can be attributed to the introduction of US-based Bitcoin ETFs. Although the cryptocurrency reached a record-high price in mid-March, it experienced a slight decline shortly after. Thiel not only discussed Marathon’s operational thresholds but also provided an overview of the company’s strategic plan. He predicted that the company would be able to achieve profitability post-halving, thanks to a break-even rate of $46,000 per Bitcoin.
Opinions among industry leaders regarding Bitcoin’s future price after the halving are divided. While some, like Arthur Hayes of BitMEX, anticipate a price decline, others, such as Ripple CEO Brad Garlinghouse, remain optimistic. Garlinghouse predicts a significant rise in cryptocurrency market capitalization, attributing this optimism to the supply-and-demand dynamics driven by institutional money flowing in through ETFs. Garlinghouse also highlighted the positive impact of ETFs on Bitcoin’s public perception, enabling larger institutional investors to enter the market. It is widely believed that the halving and the formalization of ETFs could lead to positive developments for the entire cryptocurrency ecosystem. Despite uncertainties, it appears that market growth is currently the most favorable direction for Bitcoin’s price.
Source: Bloomberg TV (2024, April 9). Marathon CEO Thiel Says Mara Bitcoin Halving Rally Partially Priced In. Retrieved from https://www.bloomberg.com/news/articles/2024-04-09/marathon-ceo-thiel-says-mara-bitcoin-halving-rally-partially-priced-in
