The next halving of Bitcoin is expected to occur in April 2024, when the block reward will drop from 6.25 BTC to 3.125 BTC.
Cryptocurrency proponents believe this more scarce supply will help maintain Bitcoin's long-term value, or at least until it reaches its 21 million cap around 2140. So far, miners have been able to make up for the loss of income when rewards are reduced, thanks to the rebound in bitcoin prices after each halving and technological advances that have improved the efficiency of mining machines.
However, Hashrate Index cryptocurrency mining analyst Jaran Mellerud predicted that nearly half of miners would be affected due to less efficient and more costly mining. The break-even electricity price for the most common miners after the halving is expected to drop from $0.12/kWh to $0.06/kWh. However, around 40% of BTC miners have operating costs above $0.06/kWh per kWh, Mellerud added, adding that miners with operating costs above $0.08/kWh will struggle to stay afloat, as will smaller miners who do not run their own mining equipment, but instead outsource it.
Wolfie Zhao, head of research at TheMinerMag, the research arm of mining consultancy BlocksBridge, said that when all factors are taken into account, the total cost of some miners is much higher than the current price of bitcoin. For many miners with less efficient operations, net profits will turn negative.
Ethan Vera, chief operating officer of Luxor Technologies, estimates that global mining debt has been reduced from $8 billion in 2022 to around $4.5 billion to $6 billion today, including senior debt, mortgages on mining equipment and bitcoin-backed loans.
Data compiled by the Hashrate Index shows that outstanding loans for 12 major listed mining companies, such as Marathon Digital Holdings and Riot Platforms, stood at around $2 billion at the end of the first quarter, down from $2.3 billion in the fourth quarter of last year.
Cryptocurrency proponents believe this more scarce supply will help maintain Bitcoin's long-term value, or at least until it reaches its 21 million cap around 2140. So far, miners have been able to make up for the loss of income when rewards are reduced, thanks to the rebound in bitcoin prices after each halving and technological advances that have improved the efficiency of mining machines.
However, Hashrate Index cryptocurrency mining analyst Jaran Mellerud predicted that nearly half of miners would be affected due to less efficient and more costly mining. The break-even electricity price for the most common miners after the halving is expected to drop from $0.12/kWh to $0.06/kWh. However, around 40% of BTC miners have operating costs above $0.06/kWh per kWh, Mellerud added, adding that miners with operating costs above $0.08/kWh will struggle to stay afloat, as will smaller miners who do not run their own mining equipment, but instead outsource it.
Wolfie Zhao, head of research at TheMinerMag, the research arm of mining consultancy BlocksBridge, said that when all factors are taken into account, the total cost of some miners is much higher than the current price of bitcoin. For many miners with less efficient operations, net profits will turn negative.
Ethan Vera, chief operating officer of Luxor Technologies, estimates that global mining debt has been reduced from $8 billion in 2022 to around $4.5 billion to $6 billion today, including senior debt, mortgages on mining equipment and bitcoin-backed loans.
Data compiled by the Hashrate Index shows that outstanding loans for 12 major listed mining companies, such as Marathon Digital Holdings and Riot Platforms, stood at around $2 billion at the end of the first quarter, down from $2.3 billion in the fourth quarter of last year.