Following ‘halving,’ Bitcoin makes slight gains as shares of crypto-linked firms soar

Since the Bitcoin network completed its fourth “halving” on Friday evening, the price of the cryptocurrency has only risen slightly, as rewards for miners adding a new block to the blockchain were slashed to 3.125 from 6.25. Historically, halvings lead to price surges, but the original cryptocurrency hasn’t yet gained 4% since the event, trading around $66,500 as of early Tuesday afternoon.

There are various reasons for Bitcoin’s price remaining fairly steady so far, and HODLers may have to play the waiting game to reap the rewards, experts told Fortune.

“The halving had no immediate impact on price. The market impact of Friday night’s movement from the 4th to the 5th epoch will be felt over the ensuing weeks and months,” Mark Connors, head of research at 3iQ, told Fortune in a note. He added that the extent to which prices change largely will depend on hashrate (the total computational power being used to mine Bitcoin).

“Friday night,” Connors added, “was more about observing the expected programmatic shift materialize: Did it execute as expected? We now can check that box.”

Another reason Bitcoin’s price hasn’t massively swung in either direction is due to “buy the rumor, sell the news” investors pushing prices down, which may be why Bitcoin dropped 12% in the two weeks before the halving. This retreat was somewhat expected, Vetle Lunde, a senior analyst at K33 Research, previously told Fortune, because the halving had been both widely documented and was anticipated by the Bitcoin algorithm. Historically, the best day to sell Bitcoin has been 500 days after a halving, Markus Thielen, founder and head of 10x Research, previously told Fortune.

Crypto stock prices

Meanwhile, Bitcoin-related stocks have seen some dramatics gains. Microstrategy, the largest corporate holder of Bitcoin, was trading near $1,350 midday Tuesday, roughly a 15% bump since Friday. Shares of top U.S. exchange Coinbase were up about 10%, to $235, meanwhile shares of Bitcoin miners have also gained, with Marathon Digital Holdings up 15%, to $9.28, and Riot Platforms up 25%, to $11.70.

The subsequent price increase of the major miners suggests market confidence that they will continue to provide sufficient hashrate to ensure the functionality of the blockchain, despite the reduced rewards, by deploying more efficient hardware to maintain profitability, Matteo Greco, a research analyst at Fineqia International, told Fortune in a note.

However, in the first 48 hours following the halving, the network’s hashrate dropped by around 5%, as miners either went offline or dialed down operations, to avoid losing money.

“A decline in total hashrate post-halving shouldn’t be interpreted as a sign of stress within the mining industry but rather as a typical response to the event. Over time, the hashrate is expected to rebound as miners enhance efficiency and competition intensifies,” Greco said.

As larger miners bought more efficient machines this year, Thomas Chippas, CEO of Argo Blockchain, anticipates that the total hashrate will increase when those computers arrive from manufacturers and are plugged into the network.

You’ll see more hashrates slowly come back online,” Chippas told Fortune. “The unknown factor, of course, is the rate of change of total hashrate on the network, the difficulty change [of production], and then the price of Bitcoin.”