Bitcoin Halving Could Impact Profitability of Major Miners
A recent report from financial firm Cantor Fitzgerald suggests that the profitability of major publicly traded Bitcoin (BTC) miners could be severely affected after the upcoming halving event. This event, scheduled for later this year, will cut the reward miners receive in half, posing challenges for mining operations with high overhead costs. The report estimates that only two miners, Bitdeer and CleanSpark, are likely to remain profitable under the new reward structure if BTC’s price stays above $40,000. On the other hand, companies like Argo Blockchain and Hut 8 Mining may struggle to maintain profitability with post-halving costs exceeding $60,000 per Bitcoin.
Challenges for Marathon Digital and Riot Blockchain
The report also highlights that Marathon Digital and Riot Blockchain, with market values of $3.62 billion and $2.19 billion respectively, may face difficulties in maintaining profitability. Their estimated cost to produce a single BTC post-halving is around $50,559 and $43,913 respectively. However, there are positive aspects as well, with Bitdeer and CleanSpark emerging as the most efficient miners, having lower “all-in” costs per Bitcoin at $17,774 and $36,896 respectively.
Bitcoin Price Recovery and Miners’ Selling Pressure
While Bitcoin’s price has recently shown signs of recovery and is currently trading above $41,000, miners are reportedly increasing their selling pressure ahead of the halving event. On-chain data indicates a spike in the Miners’ Position Index (MPI), suggesting increased selling activity. A higher MPI value indicates potential heavy selling that could exert bearish pressure on Bitcoin’s price.
Hot Take: Potential Impact on Mining Industry
The upcoming Bitcoin halving event poses challenges for major publicly traded miners. With the reward being cut in half, profitability may be severely impacted for companies with high overhead costs. Cantor Fitzgerald’s report indicates that only two miners, Bitdeer and CleanSpark, are likely to sustain profitability if BTC’s price remains above $40,000. However, major players like Argo Blockchain, Hut 8 Mining, Marathon Digital, and Riot Blockchain may struggle to maintain profitability post-halving. This presents both opportunities and risks for the mining industry as it navigates the changing landscape of Bitcoin mining.
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