As the bitcoin halving event, scheduled for later this year in April, approaches, financial firm Cantor Fitzgerald has released a report indicating that after the halving, the profitability of major publicly traded btc miners could be severely affected.
Eleven out of thirteen of these miners, including notable names like Argo Blockchain and Hut 8 Mining, may struggle to remain profitable.
Evaluation of the profitability of the main miners after the event
This impending halving will halve the reward miners receive, a mechanism intrinsic to btc's design to preserve its scarcity. While the event is often seen as a bullish catalyst for the long-term btc price, it poses challenges for mining operations, especially those with substantial overheads.
Cantor Fitzgerald's analysis, which highlights the “all-in” cost for bitcoin, estimates that only two miners, Bitdeer and CleanSpark, are likely to remain profitable under the new rewards structure, assuming the btc price remains above the threshold. of 40,000 dollars.
Meanwhile, Argo Blockchain (ARBK) and Hut 8 Mining (HUT) are flagged as the highest risk entities, facing an estimated cost per bitcoin post-halving exceeding $60,000.
The report further indicates that major industry players 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.
Its projected cost to produce a single btc after the halving is approximately $50,559 for Marathon Digital and $43,913 for Riot Blockchain.
Furthermore, despite the looming challenges, there are positives in the report. Bitdeer and CleanSpark emerge as the most efficient miners, with the lowest all-in costs per bitcoin, at $17,774 and $36,896, respectively.
*BREAKING: new today!
No matter the department, the entire team @CleanSpark_Inc bet on efficiency. EFFICIENCY of uptime, equipment, capital, operations, community engagement, energy, strategy, growth and other metrics.
Today's new report from the investigation… pic.twitter.com/YgQ6XrIXh2
– S. Matthew Schultz (@smatthewschultz) January 25, 2024
bitcoin (btc) Latest Price Action
In particular, the broader bitcoin market is currently showing signs of recovery, which could positively impact the mining industry. Despite a recent drop, the price of bitcoin has seen a modest increase, currently trading above $41,000.
This rally, however, follows a period of slowdown, which saw the asset see a significant drop over the past two weeks, falling from a high of over $48,000, leading to a 10.4% drop during this period.
Meanwhile, as the halving event approaches, bitcoin miners are reportedly increasing their selling pressure. On-chain data indicates a sharp increase in the Miners Position Index (MPI), suggesting increased sales activity.
The MPI tracks the relationship between miner outflows and the 365-day moving average. A value above 1 indicates possible heavy selling, which could put downward pressure on the price of bitcoin.
Miners sell bitcoin reserves before the halving: a strategic move
“In fact, the flow of bitcoin?src=hash&ref_src=twsrc%5Etfw” target=”_blank” rel=”noopener nofollow”>#bitcoin from miners to exchanges is now three times larger than the movement from exchanges to miners. “This trend indicates strong selling pressure from the mining community.”
By…
– CryptoQuant.com (@cryptoquant_com) January 25, 2024
Featured image from Unsplash, chart from TradingView
