halving 2024

YEREVAN (CoinChapter.com) — As Bitcoin and the crypto market at large anticipate a halving event in April 2024, it is important to discuss the implications of the event on miners and broader BTC investors.

This halving, a scheduled reduction in the block subsidy for miners, could transform the Bitcoin mining landscape for the current year. Meanwhile, according to the latest CoinShares report, the industry is currently witnessing a surge in power demand to 115 terawatt-hours, and the mining rewards peaked at a yearly high in late 2023.

Mining revenue peak.
Mining revenue peak. Source: CoinShares

Rising Bitcoin Mining Costs and Efficiency Challenges

With halving 2024 on the horizon, Bitcoin miners face escalating costs and efficiency challenges. The expected increase in the cost of production post-halving, from $16,800 to $27,900 per Bitcoin, underscores a pressing need for strategic adaptation. This period marks a critical juncture where the efficiency of mining operations will determine the sustainability of miners in the Bitcoin network.

The report also highlighted a trend towards sustainability in Bitcoin mining. The shift to sustainably sourced energy, now accounting for 52% of the industry’s energy use, indicates a significant reduction in emission intensity.

This transition is not just environmentally significant; it also repositions Bitcoin mining as a potential solution to the global issue of gas flaring associated with oil drilling. By leveraging flared gas for Bitcoin mining, the industry could contribute to a substantial reduction in carbon emissions.

Financial Health of Miners Ahead Of Halving 2024

The report also compared the previous 2020 halving to the current statistics. Researchers determined that while the economy initially deteriorated, the price response was enough to allow miners to continue their operations.

Miners are in much better shape now than before. In addition, a series of recently announced machine deals suggest that miners are working to improve their fleets and efficiency, which should reduce costs even further going into the halving.

read the CoinShares report.

The financial landscape for Bitcoin miners is set for a transformation post-halving 2024. Miners must navigate the complexities of reduced block subsidies while maintaining operational efficiency. The analysis of various mining companies’ financial health reveals a mixed picture. Companies like Riot Blockchain and Marathon Digital Holdings appear well-positioned to adapt to these changes thanks to efficient cost structures.

Additionally, differently to 2020, Bitcoin has two significant catalysts ahead: the recent approval of
a spot Bitcoin ETF in the US and the easing of monetary policy by the Fed. Both factors are likely to provide a considerable boost to the Bitcoin price and further contribute to “clearing the halving hurdle” in a similar or better fashion as last time.

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