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The Bitcoin Halving of 2024: Will It Push Democratization or See Small Market Players Locked Out?

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With the cryptocurrency market regaining momentum after a significant correction that stretched throughout 2022 and early 2023, analysts are now making forecasts on Bitcoin price predictions for 2024. While the recent approval of the Bitcoin ETF has provided an additional impetus, many anticipate the BTC price chart to enter a true upward trajectory following the next Bitcoin halving date, estimated for April 2024.

At the same time, bitcoin mining experts do not completely share the industry's optimism, as the upcoming reduction in mining rewards may revise the profitability for many players in the industry. According to analysts, the mining reward drop to 3.125 BTC may cause substantial turbulence in the mining market, leading to the elimination of many minor players.

Simultaneously, whales will have a chance to consolidate their positions by filling the potential gap that will emerge. The key success factors to withstand the storm and scale the revenue model might be the farms' productivity and access to cheap energy. Most minor players usually lack both aspects, indicating a potential shift towards a more closed and monopolized market model.

Entering the BTC mining market without that poses a serious challenge, with various hurdles to overcome. Foremost among these is the high infrastructure cost, turning the process of establishing a bitcoin mining farm into a costly venture. The increasing significance of electricity prices also introduces additional limitations, rendering many regions worldwide practically inhospitable for this type of business.

Aside from that, mining infrastructure deployment is a time-consuming process, taking no less than several months from the time miners are purchased until they are delivered, set up, and plugged in. On the eve of the BTC halving, expected to bring a structural shift to the market, it is hard to predict what the unit economy will look like down the road when the newly added mining equipment will be deployed.

Recognizing that every change may also create space for innovation, the company GoMining aims to address the aforementioned struggles for smaller players still willing to stake their claim to the bitcoin mining pie. Relying on the vision of the Liquid Bitcoin Hashrate, GoMining has introduced a way to reduce entry costs and shorten the onboarding period to only one day by matching the hashrate generated at their nine data centers worldwide to NFTs.

As a result, NFT holders gain ownership of a real share of bitcoin mining power, avoiding the necessity of handling maintenance risks and expenses, which are both managed by the company. According to GoMining CEO Mark Zalan, this approach builds a vital synergy between retail miners and the company itself.

"The Liquid Bitcoin Hashrate vision, at its core, is designed to make the bitcoin mining market a more transparent and miner-friendly environment. As a mining enterprise with over six years of expertise, we have an in-depth understanding of the bottleneck points that exist in this sphere," claims the GoMining CEO.

Acting as a bridge between physically generated computing power sources and individual miners, GoMining NFT miners may appear as a rare alternative for those looking to start mining from scratch, bringing the prospect of market democratization amidst the prevailing market trend.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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