Bitcoin’s Halving Will Have “Little Impact” on the Ecosystem, F2Pool CEO Says

Mao Shixing, the co-founder and CEO of the world’s sixth biggest cryptocurrency mining pool F2Pool, has recently revealed he believes bitcoin’s halving is going to have “little impact” on the flagship cryptocurrency’s ecosystem.

While speaking to Chinese news outlet Jinse finance, he noted that bitcoin’s halving, expected to occur in 2020, won’t have a big impact as the community is already preparing for it. He was quoted as saying:

We mentally prepare ourselves for Bitcoin’s next halving, so the event is expected to have little impact on the Bitcoin ecosystem. In addition, the nanometer-size chips used to mine cryptocurrencies will increase the lifecycle of mining rigs and the investment model of the mining machine will be different then.

Bitcoin’s halving is set to reduce the flagship cryptocurrency’s inflation rate, as block rewards will drop from 12.5 BTC to 6.25 BTC. The event occurs every four years or 210,000 blocks on the cryptocurrency’s network, and is now expected by March 2020.

Some have claimed that since mining rewards will drop, it’ll take more resources to maintain the cryptocurrency’s network and less BTC are going to be created, the price is set to increase. Shixing’s words, translated by local news outlet 8BTC, revealed he’s taking a more cautious approach.

According to the CEO, “investment incomes from mining rigs will level out over time,” and the future of cryptocurrency mining will be based on home appliances that’ll be used for the purpose. This, he claimed, will lead to a “dramatic increase of bitcoin miners and players in the bitcoin ecosystem will see an explosive growth.”

Despite his approach, Shixing didn’t attempt to predict where bitcoin’s price will be at before or after the halving. He was then asked what miners could do to “turn adversity into opportunity.”

Responding, he noted last year’s cryptocurrency craze that saw most cryptos hit new all-time highs attracted new miners, which added their hashpower to the network. Now that BTC’s price is dropping, this will lead to a crisis, he said. As such, miners need to focus on surviving.

Miners need to control their own risks, and reduce the leverage. The critical thing is to survive. In the future, house appliances used to mine cryptocurrencies and mining equipment running on cloud computing and AI will be the directions for the space.

Earlier this year, as CryptoGlobe covered, F2Pool revealed the necessary crypto prices for its operations to remain profitable. At the time, it was revealed the cryptocurrency needed to stay above $4,420 for the Antminer S9 to keep making a profit.

Other machines, like the T9 and S7, are claimed to no longer be profitable. Over the past 3 months, 8BTC reports, F2Pool has been losing “millions of yuan” over the bear market. The pool, along with several other cryptocurrency miners, is likely mining at a loss hoping crypto prices come back up in the near future.

BTC Now Below $8300, but Tom Lee Says ‘2020 Should Be Great for Bitcoin’

Siamak Masnavi

On Thursday (January 23), Thomas Lee, Co-Founder, Managing Partner, and the Head of Research at independent research boutique Fundstrat Global Advisors, while appearing as a guest on CNBC's post-market show "Fast Money", predicted that "2020 Should Be Great for Bitcoin" and explained why.

According to data from CryptoCompare, at press time (around 10:20 UTC on January 24), Bitcoin is trading at $8,273:

BTC-USD 24 Hour Chart on 24 Jan 2020.png

This is the first time that Bitcoin has traded below the $8,300 level since January 14, as you can see in the two-week BTC-USD price chart shown below:

BTC-USD 2 Week Chart on 24 Jan 2020.png

Since Bitcoin reached $9,151 at 01:00 (UTC) last Sunday (January 19), the BTC price has been steadily falling, perhaps in anticipation of the "traditional" slowdown in Bitcoin trading around the time of the Chinese New Year (which, this year, starts on 25 January 2020 and ends on 11 February 2021). This expected drop in Bitcoin trading volumes was something that Arthur Hayes, Co-Founder and CEO of crypto derivatives exchange BitMEX, predicted in a tweet he sent out yesterday:

However, Lee, does not seem concerned about the currently falling prices of Bitcoin and altcoins in the crypto market.

Lee, who was appearing on Fast Money to give his views on the stock, bond, and crypto markets, was asked by the shows's host, CNBC news anchor Brian Sullivan, if he was still bullish on Bitcoin.

Lee replied:

"Yeah, 2020 should be great for Bitcoin because you got number one the halvening happening -- the block reward for miners getting cut in half -- that's a good supply demand change. I think last year the White House killed the Bitcoin rally with their opposition, but with the presidential election cycle underway, it's not gonna be in the headlines, and that's bullish for Bitcoin. And then with geopolitical tensions in the Middle East, I think that's good for crypto... We're getting a lot more interest in it from our clients."

It is worth remembering that two weeks ago Lee tweeted about a report he had published on January 9 about the outlook for crypto in 2020. According to this report, there are three positive convergences/catalysts for Bitcoin in 2020:

  • Bitcoin halving/halvening (which is expected to take place around 12 May 2020).
  • Geopolitical tensions in the Middle East.
  • 2020 U.S. Presidential Election

Lee said at the time that the bottom line is that "financial markets tend to discount 1-3 months, and maybe 6 months (max)" and therefore the "highest probability is halvening not priced in."