Bitcoin miners are under pressure following the recent halving, which cut their block rewards to just 3.125 BTC. This reduction has increased financial strain on mining operations. Even though Bitcoin (BTC) soared to an all-time high of over $70,000 in March, the price now sits around $58,429, showing a slight drop in the last 24 hours.
What will happen next?
Data from IntoTheBlock shows that the reward for Bitcoin miners has significantly dropped. In the 2020 halving, miners received 7,010 BTC, which was worth nearly $76 million at that time. However, in the recent 2024 halving, miners’ rewards have drastically decreased to 471.88 BTC, valued at just $28.1 million.
Adding to their challenges, the Bitcoin network’s hashrate has continued to rise. In 2020, the hashrate was 140.93 million terahashes per second (TH/s). Now, in 2024, it has surged to 695.84 million TH/s.
This increase reflects the heightened competition among miners and the need for more computational power, making mining even more difficult and costly.
A report from Wall Street bank Jefferies reveals that mining profitability is also dropping. The average daily revenue per exahash fell by 11.8% in August compared to the previous month, showing how market volatility and rising expenses are squeezing miners’ profits.
PlanB, the creator of the Bitcoin Stock-to-Flow (S2F) model, voiced concerns about the future of mining. He says the halving’s impact will continue to hurt miners unless Bitcoin’s price doubles. According to PlanB, BTC must reach $116,468 from its current $58,234 to trigger the next big price surge, or “bull pump.”
In response to falling profits, many publicly traded North American mining companies are upgrading their equipment. These upgrades allow miners to increase their hashing power without consuming more energy, helping them cope with economic pressures.
Marathon CEO Fred Thiel stressed that improving technology, rather than expanding sites or using more energy, is key to surviving in the mining industry.
Some miners are adapting differently. Core Scientific, which came out of bankruptcy earlier this year, has restructured its infrastructure to support artificial intelligence (AI) and high-performance computing (HPC). This shift could point to a new direction for the industry as miners seek alternative ways to stay profitable.
Also Read: No Sell-off Needed? Bitcoin Whales Buy Big While Old Holders Stay Put
The future of Bitcoin mining is uncertain, but one thing is clear: miners must adapt or perish.
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