Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
As the Bitcoin halving event, scheduled to occur later this year by April, approaches, financial firm Cantor Fitzgerald has recently released a report indicating that post-halving, the profitability of major publicly traded BTC miners could be severely impacted.
Eleven out of thirteen of these miners, including notable names such as Argo Blockchain and Hut 8 Mining, may struggle to maintain profitability.
Assessing The Profitability Of Top Miners Post-Event
This impending halving will slash the reward miners receive by half, a mechanism intrinsic to BTC’s design to preserve its scarcity. While the event is often seen as a bullish catalyst for BTC’s price in the long run, it poses challenges for mining operations, especially those with substantial overheads.
Cantor Fitzgerald’s analysis, spotlighting the “all-in” cost per Bitcoin, estimates that only two miners, Bitdeer and CleanSpark, are likely to sustain profitability under the new reward structure, assuming BTC’s price stays above the $40,000 threshold.
Meanwhile, Argo Blockchain (ARBK) and Hut 8 Mining (HUT) are flagged as the most at-risk entities, facing a post-halving estimated cost per Bitcoin exceeding $60,000.
The report further indicates that major players in the industry, Marathon Digital (MARA) and Riot Blockchain (RIOT), with market values of $3.62 billion and $2.19 billion respectively, may also struggle to maintain profitability.
Their predicted cost to produce a single BTC post-halving stands at roughly $50,559 for Marathon Digital and $43,913 for Riot Blockchain.
Furthermore, despite the impending challenges, there are bright spots in the report. Bitdeer and CleanSpark emerge as the most efficient miners, with lower “all-in” costs per Bitcoin, at $17,774 and $36,896, respectively.
*BREAKING – new today!
No matter the department, the entire team at @CleanSpark_Inc is committed to efficiency. EFFICIENCY of Uptime, Equipment, Capital, Operations, Community Engagement, Energy, Strategy, Growth, and other metrics.
Today’s brand new report from the research… pic.twitter.com/YgQ6XrIXh2
— S Matthew Schultz (@smatthewschultz) January 25, 2024
Bitcoin (BTC) Latest Price Action
Notably, the broader Bitcoin market is currently showing signs of recovery, which could positively impact the mining industry. Despite a recent slump, Bitcoin’s price has seen a modest increase, currently trading above $41,000.
This uptick, however, follows a period of downturn, where the asset saw a significant drop in the past two weeks falling from a peak above $48,000 leading to a 10.4% decline over this period.
Meanwhile, as the halving event draws near, Bitcoin miners are reportedly ramping up their selling pressure. On-chain data indicates a sharp spike in the Miners’ Position Index (MPI), suggesting increased selling activity.
The MPI tracks the ratio of miner outflows to the 365-day moving average. A value greater than 1 indicates potential heavy selling, which could exert bearish pressure on Bitcoin’s price.
Miners Selling Bitcoin Reserves Ahead of Halving – A Strategic Move
“In fact, the flow of #Bitcoin from miners to exchanges is now three times higher than the movement from exchanges to miners. This trend signals a strong selling pressure from the mining community.”
By…
— CryptoQuant.com (@cryptoquant_com) January 25, 2024
Featured image from Unsplash, Chart from TradingView
Publication date
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.