Following Bitcoin’s (BTC) latest halving in 2024, the cryptocurrency market stands at another turning point. This halving has posed tougher survival challenges for miners and prompted the market to reconsider BTC’s long-term growth potential. Meanwhile, Ethereum’s (ETH) successful transition to the Proof of Stake (PoS) mechanism and the remarkable success of staking have led the market to explore a critical question: Will future BTC trends be more influenced by mining or staking mechanisms? This article delves into the roles and impacts of staking and mining on BTC’s future price volatility, helping investors better grasp trend shifts.

What are Mining and Staking?

Mining and Proof of Work (PoW)

Bitcoin’s security and operation rely on the Proof of Work (PoW) consensus mechanism, where miners worldwide compete to calculate hash values to earn the right to record transactions. Successful miners receive block rewards for each block they mine. This mining mechanism ensures the network’s decentralization and security, allowing anyone with sufficient computational power to become a miner without needing approval from a central authority.

Staking and Proof of Stake (PoS)

In contrast to PoW, many blockchains are adopting the Proof of Stake (PoS) consensus, also known as the “staking” mechanism. In PoS blockchains, participants must lock up a certain amount of cryptocurrency as collateral to become network validators, earning staking rewards by creating blocks and verifying transactions.

Staking is favored by new blockchains due to its higher energy efficiency and superior performance. Since Ethereum’s successful transition from PoW to PoS in September 2022, its energy consumption has decreased by approximately 99.95%, with significantly improved transaction processing efficiency. This has earned the staking validation model widespread recognition and trust. Today, many mainstream blockchains (such as Cardano and Solana) use PoS consensus, driving rapid growth in staking participation and total staked value.

Staking allows users to earn passive income by locking assets, reducing the circulating supply of tokens, alleviating market selling pressure, and enhancing blockchain security.

Comparing PoW and PoS

PoW and PoS, as two mainstream consensus mechanisms, play different roles in the crypto market. PoW networks like Bitcoin rely on miners providing computational power to maintain operations, with miners earning block subsidies and transaction fees as economic incentives. In PoW, a more active network attracts more mining power, increasing security but also requiring high energy consumption and equipment costs.

In PoS, there are no traditional miners. Instead, stakers (validators) lock tokens to participate in consensus. Their rewards come from newly minted blocks and transaction fees, and they must keep nodes online and operate honestly to avoid penalties like slashing.

Since staking does not require massive energy consumption, it has lower barriers to entry and is more environmentally friendly, enabling broader participation from retail investors and boosting community engagement. Overall, Bitcoin’s PoW emphasizes strict deflationary supply and security through work, while staking introduces new influences on market dynamics through efficiency and profit incentives.

Comparison table between mining and staking

The Impact of Mining and Staking on BTC Trends

The Relationship Between Mining and BTC Price

Miners are the cornerstone of network security for BTC. Higher total hash power exponentially increases attack difficulty, making the network more robust. Economically, however, PoW mining also brings continuous selling pressure. Due to the high costs of electricity, labor, and other operational expenses, miners often need to sell mined BTC regularly to cover costs, creating a steady stream of endogenous sell orders.

During market downturns, miners face greater financial pressure, potentially leading to Miner Capitulation—where BTC prices fall below mining costs, forcing smaller, less resilient miners to exit the market and sell their holdings to cut losses, further driving prices down.

(2) For example, when Bitcoin fell below the $90,000 mark in February 2025, signs of miner capitulation emerged. However, during bull markets, the situation reverses. Rising prices improve miner profitability, prompting some to hold rather than sell, or even reinvest to expand operations. New miners also enter the market, pushing up total hash power and mining difficulty. According to BitInfoCharts data, Bitcoin’s total hash rate continued to rise after the 2024 halving, reaching a peak of 992 EH/s in February 2025, reflecting sustained market optimism about BTC’s future.

Thus, mining behavior has a cyclical impact on BTC prices: miner capitulation can amplify downturns during bear markets, while miner accumulation and expansion bolster bullish sentiment during uptrends, creating a unique market rhythm.

How Does Staking Affect Market Liquidity?

One of staking’s most significant effects is regulating the circulating supply. When large amounts of tokens are locked in staking, the actual freely tradable supply decreases, creating a liquidity contraction effect on supply and demand.

Take Ethereum as an example. Since transitioning to PoS, the proportion of staked ETH has steadily increased. According to Dune Analytics, over 27% of ETH is currently staked at the time of writing. Such a high proportion of locked supply means less ETH is available for selling, which helps stabilize market sell pressure.

Additionally, PoS models typically distribute newly minted tokens as rewards to stakers. If stakers choose to restake rather than sell, the new supply is effectively frozen again. Thus, staking acts as a liquidity absorber.

In summary, staking supports prices by locking supply and reducing circulating tokens, while incentivizing long-term holding for rewards. If future BTC cross-chain staking scales up, it could further reduce BTC’s circulating supply, aiding long-term price stability.

Future Trends and Predictions

Will BTC’s Mining Model be Influenced by Staking?

Currently, Bitcoin’s (BTC) mainnet is unlikely to abandon its mining (PoW) mechanism in the short term, as PoW is still widely regarded as Bitcoin’s most critical security guarantee and foundation of decentralization. Historically, the Bitcoin community has never formally proposed transitioning BTC to a staking (PoS) consensus.

However, this doesn’t mean the rise of staking economics won’t impact BTC at all. In fact, the staking trend is already indirectly influencing BTC’s ecosystem. For example, an increasing amount of Bitcoin is being moved to other blockchains (e.g., Babylon) via “cross-chain” methods to earn additional yields.

Imagine this: as more people transfer BTC from the main chain to other chains for staking, the actual freely circulating BTC in the market decreases. Although BTC itself hasn’t shifted to PoS, this indirect approach still reduces market liquidity, providing long-term price support.

Moreover, as BTC’s block rewards halve every four years, approaching near-zero rewards by around 2140, the network will rely more on transaction fees to incentivize miners to maintain security. The network may face security challenges if on-chain transactions are insufficient and fees cannot cover mining costs.

In summary, while BTC is unlikely to abandon PoW mining in the short term, staking has become an undeniable trend from a long-term ecosystem perspective.

Cross-Chain Staking as a Future Trend in BTC’s Ecosystem

Therefore, Bitcoin’s future growth potential may increasingly stem from innovations like “cross-chain staking” or “decentralized finance (DeFi)” rather than relying solely on mining and passive holding.

BTC cross-chain staking refers to holders depositing BTC on other blockchain platforms to earn additional interest or yields through staking or lending. For example, using WBTC, users can convert BTC into WBTC and deploy it in Ethereum-based DeFi applications like lending protocols (e.g., Aave) or yield farming (e.g., Uniswap), earning higher returns than simply holding BTC.

WBTC’s market cap and supply surged starting in 2020 (Source: Dune Analytics)

Additionally, Bitcoin’s Layer 2 solutions, such as Stacks and Rootstock (RSK), allow users to convert BTC into SBTC or RBTC and deposit them into specific protocols or platforms to earn stable additional yields, enhancing BTC’s appeal as a holding asset.

Under this trend, BTC could become a “value-anchoring asset” in the cross-chain financial market, similar to the role of the U.S. dollar or gold in traditional finance, serving as a foundational asset and security guarantee for various on-chain applications.

Practical Implications for Investors

From a traditional perspective, Bitcoin’s price fluctuations have often been closely tied to miner activity. However, as staking gains traction, this dynamic may be quietly shifting. In the future, the key factor influencing BTC prices may no longer be mining alone, but the cross-chain financial ecosystem centered around staking. For investors, this means adjusting strategies previously focused solely on miner activity to monitor developments in staking ecosystems instead.

Specifically, investors can observe and position themselves in the following ways:

Track BTC Cross-Chain Staking Scale and Trends

Monitor changes in the amount of BTC being staked. As more BTC is locked in cross-chain staking solutions, the actual tradable supply decreases, typically supporting BTC’s price.

Include BTC in Cross-Chain Staking Allocations

Investors can go beyond simply holding BTC and actively use cross-chain solutions like WBTC or Babylon to earn additional interest or passive income. This approach improves capital efficiency and reduces the opportunity cost of idle holdings.

If you’re interested in using BTC for cross-chain staking or DeFi applications, here are some options and estimated annual percentage yields (APY):

Note: The above data is for reference only. Actual yields may vary due to market conditions, platform policies, and other factors. Investors should carefully review platform terms and conditions and fully understand potential risks before participating in staking or other DeFi activities.

Still Monitor Miner Activity for Short-Term Price Volatility

Although staking’s influence is growing, miners remain an important indicator for short-term market trends. Especially after each halving, miners’ profitability faces significant pressure, potentially leading to concentrated sell-offs and short-term price declines. Investors should remain vigilant about these fluctuations to time their entries and exits.

Conclusion

While Bitcoin’s mainnet mining model is unlikely to change in the short term, the rise of staking has significantly improved BTC’s capital efficiency in cross-chain and DeFi applications. In the future, staking’s influence on BTC trends may surpass that of mining.

Thus, investors should closely monitor the latest developments in staking and cross-chain ecosystems, adjusting their strategies accordingly to capitalize on Bitcoin’s increasingly diverse profit opportunities. BTC is no longer just a passive asset for appreciation; through cross-chain staking, investors can actively unlock more diversified income streams, further enhancing overall investment returns.