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Let's say the price of a bitcoin is US$33,000, and all the miners mine it or not mine it if their electricity kWh price is too high, and it is at an equilibrium that it is somewhat profitable and worthwhile for the miners to mine bitcoin.

Then in year 2024 May, when the rewards changes from 6.25 bitcoins to 3.125, and if the price of a bitcoin stays at $33,000, then it become unprofitable for many miners, and they would stop the mining, and for all the miners to still keep on mining, they would think that the price of one bitcoin is more like $66,000 as before. So would the perceived price of a bitcoin double every time the reward becomes half?

Or would the price just stay low, but just that all of a sudden, a portion of the miners would stop, but when it becomes easier to "win" the block every 10 minutes, some miners will join again, until it reaches an equilibrium around this lower price? But it seems many miners would think, it is so difficult to mine and be profitable, and therefore they are not selling their bitcoins at $33,000 but would demand a higher price.

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TLDR: The price of bitcoin determines how many miners are mining, not the other way around.

Your last paragraph is on point! After a block halving, every miner unprofitable at the new reward will stop mining. They will stop mining because they need to pay for the electricity they burn. But for each miner that stops mining, the remaining miners become more profitable. The remaining miners become more profitable because it's easier to find new blocks! That means they have to use less electricity to find new blocks, and there is less wear on their mining hardware. So just like you say, after a while it reaches an equilibrium.

The big peak in this picture is May 11th, 2020, the day the previous halving occurred. You can see the estimated hash rate went from 119 to 76 Ehash/s. That's a lot of miners that had to shut off! enter image description here

It's also important to note that miners don't decide what the price of bitcoin is. Miners just react to the bitcoin price. Starting their miners when it is profitable and shutting them down when it is no longer profitable. The total amount of bitcoins that are sold or bought determine the price of bitcoin.

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  • so I guess if the miners collectively have a lot of bitcoins (if each miner has 1 bitcoin and I wonder how many miners there are), then if all of a sudden, they won't sell their bitcoin at $33,000 but want to get more, then it creates a sudden drop of supply. If other people also feels that the supply will be less and the price should go up and hold on to it, then the supply becomes even less, then if the buyers want to buy it but cannot, they will need to bid a higher price or if they buy it at the market price, then they will get matched with a seller asking for a higher price – nonopolarity Feb 1 at 21:12
  • That doesn't happen though. In the real world they can't afford to not sell their bitcoin. Also, it's not necessarily the case that the supply goes down by a lot if miners stop selling. There are 900 bitcoins mined each day, but 18 616 581 already mined bitcoin. (not counting lost ones) Those 18 616 581 coins already in circulation have a lot more to say about the supply of bitcoin than new coins mined. – Bjørn Olav Jalborg Feb 1 at 22:01
  • I see your point... I was just thinking, if some swordsmen are making swords, and all of a sudden, they know the special metal they use to make the sword will be difficult to get, and therefore, the swords will be hard to get, and people holding and have the collection of swords know about this situation, would they hold onto their sword tighter, and not let go of them as easily. So if they sold they sword for $100 in the past, will they all feel, I got to get more for the sword now, perhaps $110, or perhaps more, and I will see what kinds of offers I get first – nonopolarity Feb 1 at 22:46
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    According to Messari, Bitcoin's approximate real 24h-trading volume is $6.8B. That's about 220 times the value of the coins mined per day. Miners have an influence, but there are a lot of other people creating offers. For example exchanges selling their trading fees. – Murch Feb 1 at 23:10
  • hm... by the way, Bitcoin's award was halved 3 times since 2009? But Bitcoin's price has risen more than 8 times. (2 to the power 3, meaning more than doubling 3 times) – nonopolarity Feb 2 at 6:27

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