The next halving of Bitcoin is expected to occur in April 2024, when the block reward will drop from 6.25 BTC to 3.125 BTC.
Cryptocurrency proponents argue that this more scarce supply will help maintain Bitcoin's value in the long term, or at least until it reaches its 21 million-unit cap around 2140. So far, miners have been able to make up for the loss of income when rewards are reduced, thanks to the Bitcoin price rebounding after each halving and technological advances improving the efficiency of miners.
However, Hashrate Index cryptocurrency mining analyst Jaran Mellerud predicts that nearly half of all miners will be affected due to less efficient and more expensive mining. The break-even tariff for the most common miners after the halving is expected to fall from $0.12/kWh to $0.06/kWh. However, around 40 per cent of BTC miners have operating costs per kWh higher than $0.06/kWh. miners with operating costs higher than $0.08/kWh will struggle to stay afloat, as will smaller miners that don't operate their own mining equipment, but outsource it, Mellerud added.
Wolfie Zhao, head of research at TheMinerMag, the research arm of mining consultancy BlocksBridge, said that when all factors are taken into account, the total cost for some miners is much higher than the current price of bitcoin. For many miners with less efficient operations, net profits will turn negative.
Ethan Vera, chief operating officer of Luxor Technologies, estimates that the global mining industry's debt has been reduced from $8 billion in 2022 to around $4.5 billion to $6 billion today, including senior debt, mining equipment mortgages and bitcoin-backed loans.
Loans outstanding at 12 major listed mining companies, such as Marathon Digital Holdings and Riot Platforms, stood at around
2BN
at the end of the first quarter, down from $2.3bn in the fourth quarter of last year, according to data compiled by Hashrate Index.
Cryptocurrency proponents argue that this more scarce supply will help maintain Bitcoin's value in the long term, or at least until it reaches its 21 million-unit cap around 2140. So far, miners have been able to make up for the loss of income when rewards are reduced, thanks to the Bitcoin price rebounding after each halving and technological advances improving the efficiency of miners.
However, Hashrate Index cryptocurrency mining analyst Jaran Mellerud predicts that nearly half of all miners will be affected due to less efficient and more expensive mining. The break-even tariff for the most common miners after the halving is expected to fall from $0.12/kWh to $0.06/kWh. However, around 40 per cent of BTC miners have operating costs per kWh higher than $0.06/kWh. miners with operating costs higher than $0.08/kWh will struggle to stay afloat, as will smaller miners that don't operate their own mining equipment, but outsource it, Mellerud added.
Wolfie Zhao, head of research at TheMinerMag, the research arm of mining consultancy BlocksBridge, said that when all factors are taken into account, the total cost for some miners is much higher than the current price of bitcoin. For many miners with less efficient operations, net profits will turn negative.
Ethan Vera, chief operating officer of Luxor Technologies, estimates that the global mining industry's debt has been reduced from $8 billion in 2022 to around $4.5 billion to $6 billion today, including senior debt, mining equipment mortgages and bitcoin-backed loans.
Loans outstanding at 12 major listed mining companies, such as Marathon Digital Holdings and Riot Platforms, stood at around
2BN
at the end of the first quarter, down from $2.3bn in the fourth quarter of last year, according to data compiled by Hashrate Index.