The late co-founder and project manager Jake Yocom-Piatt predicts that the upcoming reduction in Bitcoin Mining (BTC) payments will result in miners increasing prices.
“Since halving bitcoin means miners get half of the bitcoins for the same amount of work, this doubles the cost of creating bitcoin,” Yocom-Piatt told Cointelegraph in an email on May 1st, adding: :
“Miners’ costs are set effectively. In order to maintain the same margins, they are encouraged to double the price at which they sell their Bitcoin. I hope these effects on the offer will drive up Bitcoin’s price . ” which means that miners’ offers increase significantly. “
Bitcoin is nearing its third cut in half
About every four years Bitcoin completes a halving event based on the parameters built into its code. Each halving halves the reward for the mined Bitcoin block.
Bitcoin has a maximum stock of 21 million coins, although not all of these coins are in circulation yet. Since its foundation over a decade ago At Bitcoin, the offering in circulation through mining premiums has grown steadily.
At current rates of about every 10 minutes, a miner will find a block in the Bitcoin network somewhere in the worldand get a reward of 12.5 BTC. Essentially, this means that 12.5 new bitcoins are launched every 10 minutes.
On May 11, the reward drops to 6.25 and miners pay less for the same amount of work.
The bitcoin price could double in the coming days
Because of this fundamental change in market dynamics Yocom-Piatt sees that Bitcoin prices are higher. “In the short term, I expect the price to roughly double, but long-term forecasts are difficult to make in the context of the boom and bust pattern of the crypto market,” he said.
“The stock-to-flow ratio increases significantly due to the halving, which is good for the Bitcoin price in the long term.”Yocom-Piatt added.
Bitcoin’s stock-to-flow model, a product of Twitter cryptanalyst PlanB, compares Bitcoin’s offering with its value, taking into account the averages. The analyst recently released an updated stock-to-flow chart for Bitcoin that contains gold and silver in the mix.