Bitcoin Mining Profitability Under Threat By April Halving, Report

In a recent warning issued by financial firm Cantor Fitzgerald, the impending Bitcoin halving event, slated for April 2024, has sent shockwaves through the Bitcoin mining community.

The halving, a deliberate reduction in the reward for mining a block of bitcoin from 6.25 to 3.125 bitcoins, aims to curtail the supply of bitcoin and enhance its long-term value.

The report’s findings paint a challenging landscape for miners, with only two out of the 13 largest publicly traded Bitcoin miners expected to maintain profitability post-halving, assuming no alterations to their operations or network difficulty.

The analysis hinges on estimating the comprehensive “all-in” cost of producing one bitcoin, incorporating electricity, maintenance, and personnel costs, with a baseline Bitcoin price assumption of at least $40,000.

Argo Blockchain (ARBK) and Hut 8 Mining (HUT) emerge as the most vulnerable miners, facing “all-in” costs exceeding $60,000 per bitcoin. Following closely are Marathon Digital (MARA) and Riot Blockchain (RIOT), with substantial market caps but daunting costs of approximately $50,000 and $44,000 per bitcoin, respectively.

Bitdeer and CleanSpark: The Bitcoin Mining Firms to Come Out Unscathed

Contrastingly, Bitdeer (BTDR) and CleanSpark (CLSK) stand out as the only two miners projected to stay profitable, boasting the lowest “all-in” costs at $17,774 and $36,896 per bitcoin, respectively.

These miners also find themselves in a favorable position to navigate the heightened mining costs post-halving, as indicated by a previous report from January 15.

Cantor Fitzgerald’s report signals a potential shakeup in the mining sector, urging miners to contemplate upgrading their equipment, cutting costs, or potentially exiting the market.

The repercussions of such decisions could reverberate across the Bitcoin network, impacting its security and decentralization, as well as influencing its price and adoption.

As the halving draws near, the cryptocurrency community watches closely, anticipating how miners will adapt to this critical juncture in Bitcoin’s evolution.