Halving Halts Profits
In April, the Bitcoin Halving could strike a severe blow to nine of the 11 largest publicly traded Bitcoin miners. According to a recent Cantor Fitzgerald report, a Bitcoin price of $40,000 could render these miners unprofitable.
Looming Losses
The report preview indicates that only Bitdeer and CleanSpark would maintain profit margins, while the remaining nine miners may need a significantly higher Bitcoin price to remain viable.
The all-in cost per coin after the halving event in April 2024 is analyzed, assuming no immediate change to operations or network hash, and reveals that the total costs a Bitcoin miner would incur in producing a single Bitcoin, including electricity costs, hosting fees, and other cash expenses.
Impact of the Halving
The Halving, which occurs every four years, was designed to control the supply of new Bitcoin entering circulation. As the supply contracts, analysts predict price increases. However, on-chain analytics company CryptoQuant highlighted that, ahead of the Halving event expected around April 22, Bitcoin miners are selling reserves. The flow of Bitcoin from miners to exchanges is now three times higher than from exchanges to miners, signaling strong selling pressure from the mining community.
Miners aim to realize profits ahead of a halving event to cover operational costs and prepare for future investments amid rising competition in Bitcoin mining with each Halving event.
Consequences for Miners
The two mining companies, Bitdeer and CleanSpark, maintain a cost-per-coin rate of $17,774 and $36,896 respectively, whereas Argo Blockchain and Hut 8 Mining are seen as the most impacted, with cost-per-coin rates of $62,276 and $60,360, respectively.
Volatile Situation
Marathon Digital, Riot Blockchain, and Core Scientific are also among those likely to be significantly impacted, indicating a potentially volatile situation for these miners.
Seeking Stability
Entrepreneur and investor Anthony Pompliano discussed the impact of the Bitcoin halving on miners in an interview with Marathon CEO Fred Thiel. He noted the necessity for investors to consider various factors in the current market environment with Spot Bitcoin ETFs approved.
Trader Tardigrade, a crypto content creator, highlighted a chart indicating the correlation of Bitcoin price movements with the change in reward per block to the miners. The current environment presents a need for miners to seek stability amidst a challenging market landscape.
Shifting Sands
The mining landscape is shifting amidst the upcoming Bitcoin Halving—miners face the challenge of maintaining profitability in a highly volatile and competitive environment that is unforgiving to inefficiencies and high operational costs.