Bitcoin Miners Face Challenges as Halving Looms and Hashprice Drops

The bitcoin mining industry is bracing for significant changes as the next bitcoin halving approaches, estimated to occur on April 22, 2024. This event is expected to have a notable impact on miners’ profitability, especially for those operating with certain types of equipment, according to TheMinerMag.

Currently, bitcoin’s hashprice, the daily revenue generated per petahash of computing power, is at $76/PH/s. However, it’s anticipated to drop by about 50% immediately post-halving. If the hashprice falls below $40/PH/s, miners, particularly those using the Antminer S19XP at an average electricity cost of $0.075/kWh, could struggle to maintain profitability.

The Antminer S19XP, although a high-performance model, may not be entirely safe in this scenario. With a hashprice drop to sub-$40/PH/s, miners would need access to the latest generation of mining equipment with efficiency below 20 J/TH or extremely low power rates (below $55/mWh) to stay in the green.

The bitcoin mining ecosystem is self-regulatory, so a drastic reduction in hashprice could lead some less efficient operators to disconnect from the network. This action would decrease the overall network hashrate and difficulty, potentially raising the hashprice again.

However, if bitcoin’s price doesn’t increase post-halving, the industry might face a challenging period similar to the summer of 2020, marked by overcapacity and strained profitability.