Follow Us

Bitcoin Halving Is in 2024; Are Miners Ready for the Change?

Share on facebook
Share on twitter
Share on linkedin

Share

Bitcoin Halving Is in 2024; Are Miners Ready for the Change?
Share on facebook
Share on twitter
Share on linkedin

Bitcoin halving is expected in April 2024 where mining rewards will be halved and the surrounding scenario is sure to create difficult situations. Per the Bitcoin protocol, mining rewards are automatically slashed in half after every 21,000 blocks. 

BTC miners are already struggling with increased power rates, hiked difficulty, and volatility in BTC prices. With the halving season, their worries can be potentially intensified, and experts believe only the most efficient miners can survive the scenario. 

Bitcoin Halving- the Hidden Storm

The first halving occurred on November 8, 2012; rewards were reduced from 50 BTC to 25 BTC. The second took place on July 9, 2016, when it dropped to 12.5 BTC. During the third halving, which took place on May 11, 2020, these rewards were reduced to 6.25 BTC, and in the next halving, the reward is to be 3.125 BTC. 

Currently, the reward for mining on the block is 6.25 BTC/Block, which is around $165,335.75. After halving, the reward would be 3.125 BTC/ Block, or around $82,669.3. 

As per the research conducted by Wolfie Zhao, Head of Research at Blocksbridge, he said publicly listed miners spend around $10,000 to $15,000 per BTC. Post-halving, the investment could swell up to $20,000 to $30,000. If, at the time, the BTC price is not significantly above the $30k mark, most miners will suffer. Similarly, JPMorgan even suggested the cost of mining BTC going up to $40,000. 

If either scenario is actual, only the most sophisticated miners will survive, while others may have to drop the shutters of their shops. Kerri Langlais, Chief Strategy Officer at BTC miner TeraWulf (WULF), argued that at the time, energy cost and efficiency of the rigs would be deciding factors. 

In the data compiled by Zhao, the production cost for mining BTC is noted to be the lowest for these companies- Stronghold Digital Mining (SDIG) with $8,200, Cipher Mining (CIFR) at $8,600, and Riot Platform (RIOT) at $10,400 per BTC. 

Bill Papanastasiou, an investment analyst at Stifel Bank, argues that since May 2023, the miners have already started the efforts to strategize the capital preservation processes. Moreover, the industry can be seen shifting towards the efficiency of machines and their operations—the factors in hand. 

During the bull run of 2021, the majority of emphasis was laid on bringing in the maximum hash rate possible. 

Added investments would be required to upgrade the mining prowess. The understated fact is the BTC mining business already has more capital investments than others, even more than the precious metal sector. With such heavy investment, anyone would expect significant output and halving scenarios could put a dent in that. 

At press time, BTC is trading at $26,381.25 with a slight drop of 0.70%; its value against Ether increased by 0.37% to 14.35 ETH. Market cap dropped by 0.71% to $511 Billion, and trading volume suffered by 32.07% to $16.58 Billion in the last 24 hours. It is still ranked at number 1 and shares a market dominance of 46.53%.

Leave a Reply

Your email address will not be published. Required fields are marked *

Download our App for getting faster updates at your fingertips.

en_badge_web_generic.b07819ff-300x116-1

We Recommend

Top Rated Cryptocurrency Exchange

-
00:00
00:00
Update Required Flash plugin
-
00:00
00:00