Kevin Shao: Bitcoin Miners Must Embrace Stability to Hedge Against the Halving

It is common knowledge within the cryptocurrency industry that the next Bitcoin halving is just around the corner. Speculations are also ongoing regarding the effect this will have on the relevant sectors.

However, Kevin Shao, the president of the blockchain division of Canaan Creatives, a leading producer of crypto mining equipment, has today, shed more light on the impact of halving on the industry. In an AMA organized by the BigOne Exchange, he discussed different aspects, including the challenges and potential opportunities that are available for investors.

According to Kevin, the very first people to face the impact of this halving will be the miners. This will be as a result of having their returns cut in half while still making the same inputs as they are now.

He acknowledged that many miners are more concerned about the profits they will receive than paying attention to the industry trends, and this has led them to suffer various losses. 

Bearing in mind that computational power and electricity supply is critical to miners and that the cost of both is very high, miners need to devise a strategy to make it less expensive and easier for them. And that is why demands for cloud computational power is becoming popular since one of the features is its “ease of use.”

For the past few weeks, the fluctuations in prices of cryptocurrencies have set panic in global markets. The outbreak of Coronavirus has also heightened this panic, and as a result, foreign exchange markets and the stock market have plunged.  

This situation affected even assets that are viewed as “safe-haven” assets, such as gold. At this moment, no one can predict precisely when the halving markets will commence.

To deal with the severe market fluctuations, Kevin recommended that miners find a stable investment technique using such tools as margin trading, futures, and other financial derivatives.

He also made it clear that although the Bitcoin halving comes with its challenges and risks, several potential opportunities come with it. 

Therefore, investors are advised to have an accurate understanding of the cryptocurrencies that will be facing halving, such as bitcoin, and to look beyond the short-term fluctuations and focus on the long-term benefits that their investments will yield. It is also advisable to evaluate their ability to endure risks.

Conclusively, it is imperative to bear in mind that “opportunities and risks correlate.” As such, everyone, both miners and investors, should be ready to take risks and grab the opportunities when they come.

NordFX