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Bitcoin Halving: Old Whales & Miners Benefit from On-Chain Shifts

Bitcoin Halving: Old Whales & Miners Benefit from On-Chain Shifts

With Bitcoin halving marking the fifth epoch in April, Ki Young Ju, founder of the crypto analytics platform CryptoQuant, has revealed intriguing profitability statistics for different entities. I utilized this data to showcase the untapped potential in various investor groups, unveiling a distinct victor: seasoned whales.

Bitcoin Rewards Old Whales, Miners

Bitcoin has favored long-time investors and those involved in mining. Based on the data, experienced Bitcoin investors, commonly referred to as “old whales,” have experienced an impressive 223% surge in unrealized profits. This indicates that their patient approach to holding investments has yielded impressive results, as increasing prices over time have greatly enhanced the value of their holdings.

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Meanwhile, investors entering the market through traditional finance (TradFi) and exchange-traded funds (ETFs), known as “new whales,” have experienced a comparatively modest 1.6% increase in unrealized profits.

Shorter investment timeframes and lower average cost bases, compared to older whales, explain this difference in behavior.

DeFi gained significant momentum in early 2020 when it surpassed the $1 billion milestone. Spot Bitcoin ETFs, particularly in the United States, are becoming increasingly popular following the approval of these products by the Securities and Exchange Commission (SEC) in January 2024.

It’s worth noting that both small miners and large mining companies such as Riot Blockchain and Marathon Digital have experienced significant gains. Unrealized profits for small miners, typically individuals or small operations, surged by an impressive 131%.

Established mining companies listed in various bourses worldwide saw a significant 81% increase in unrealized profits. Based on the provided data, it is evident that prices have been steadily increasing since October 2023. We expect this upward trend to significantly impact the upcoming epoch, turning it into a more competitive period.

A Key Metric To Watch Post-Halving

Based on the data, those who embrace new technologies early on reap the greatest rewards, capitalizing on the upward trend over time. Nevertheless, individuals in various mining roles have also received generous rewards.

It remains uncertain how miners will adapt their operations to maintain competitiveness and generate income. A coming potential decrease in the hash rate is expected in the coming days. This could significantly challenge smaller miners, potentially forcing them out of the game. On the other hand, we anticipate that prominent miners will weather the storm relatively unscathed. They may even seize this opportunity to strengthen their positions, gradually consolidating more mining power over time.

Bitcoin price trending sideways on the daily chart | Source: BTCUSDT on Binance, TradingView
Bitcoin price trending sideways on the daily chart | Source: BTCUSDT on Binance, TradingView

The daily chart depicts Bitcoin prices moving in a sideways trend. This information is sourced from BTCUSDT on Binance, as seen on TradingView.

In the grand scheme of things, the hash rate will prove to be an essential metric. As prices increase as anticipated, miners will feel motivated to invest in new equipment, thereby enhancing the security of the network.

If prices plummet as they did with Litecoin and Bitcoin Cash after the halving, it will lead to a chain of difficulty adjustments that will solidify the dominance of big cryptocurrency mining operations.

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