Bitfinex advises caution regarding the potential centralization of mining power as Bitcoin’s fourth halving approaches, raising concerns about the financial strain on small miners.

Bitcoin’s fourth halving, expected around Apr. 20, may lead to the exit of smaller miners from the market, leaving publicly traded mining companies in control, according to Bitfinex.

A recent report from Bitfinex highlights the risk of centralization in mining, which goes against Bitcoin’s decentralized principles. This concentration of power could result in transaction censorship and increased vulnerability to attacks or regulatory pressures.

Despite the potential risks, Bitfinex also suggests that the halving could have positive effects on Bitcoin’s price. The reduced coin generation rate could create scarcity and, if the price of Bitcoin rises significantly, it could offset the reduced block reward, maintaining or increasing mining profitability.

However, there is uncertainty surrounding whether this halving will follow previous patterns. Coinbase’s research report indicates that the market dynamics may be different this time, attributing the change to the emergence of Bitcoin ETFs, which have created a new demand for BTC.

At the moment, Bitcoin is trading at $68,000, as per CoinMarketCap data. Despite a slight pullback from its all-time high, industry experts are optimistic about Bitcoin’s future performance, with some expecting the price to exceed $80,000 by the end of the year.

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