The bitcoin (btc) market has been on a wild ride recently, reaching a new all-time high (ATH) before experiencing notable volatility resulting in an 8% drop to the $65,500 level on Friday.
Meanwhile, Marathon Digital, one of the largest bitcoin mining companies in the US, is preparing to acquire more electrical infrastructure and streamline operations to meet the challenges posed by reduced revenue due to the upcoming April. halving event.
bitcoin miners prepare for post-halving restructuring
According to a Bloomberg bitcoin-miner-marathon-mara-plans-to-make-purchases-to-offset-reward-halving” target=”_blank” rel=”nofollow”>reportMarathon Digital plans to acquire additional electrical infrastructure and expand its mining capacity to keep costs low and maintain profitability.
By streamlining operations and expanding its scale, Marathon aims to mitigate the impact of the impending revenue decline and ensure broader margins in the post-halving landscape.
Marathon Digital recently announced an agreement to purchase a 200-megawatt data center in Garden City, Texas, for more than $87 million. This acquisition marks the company's second major investment in electrical infrastructure after it acquired several sites for $179 million earlier this year.
By increasing your ownership of mining capacity infrastructure at 53%, up from a meager 3% the previous year, Marathon is positioning itself for greater operational efficiency and profitability, Bloomberg notes.
However, after the halving, the bitcoin mining industry is expected to undergo significant changes, with some miners facing profitability challenges and possible exits.
A profitability crisis is looming
Marathon Digital CEO Fred Thiel highlights the impact of reduced revenue, estimating that the industry's average breakeven point will rise from around $23,000 per bitcoin to approximately $43,000. Thiel stated:
After the halving, there will be some miners who will become unprofitable, perhaps challenged or perhaps looking for a way out, as their income will drop due to the rewarded bitcoin decreasing. The simple math is that if the industry average breakeven point was around $23,000 per bitcoin, it will now rise to around $43,000.
It is worth noting that this does not necessarily mean that the price of bitcoin will fall to $43,000 from its current trading price of $69,300. He equilibrium price refers to the price at which miners like Marathon Digital can cover their operating costs and achieve profitability. It is not directly related to the market price of bitcoin.
At the time of writing, btc is trading at $69,300 and is about to reclaim the important milestone of $70,000. The cryptocurrency saw a notable spike in volatility during the early hours of the trading session on Friday, but has since recovered, mitigating its losses from 8% to 2.5%.
Featured image from Shutterstock, chart from TradingView.com
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