Bitcoin Mining Profitability Post-Halving Relies On Price at $80,000

by

According to Ki Young Ju, the CEO of CryptoQuant, the data suggests that the cost of mining Bitcoin using Antminer S19 XP after the halving event will increase from approximately $40,000 to around $80,000.

The cost of mining Bitcoin with S19 XP machines, widely used by miners in the US, is projected to rise from $40,000 to $80,000 by the end of this month following the halving event. (Source: Chart by @clayop)

— Ki Young Ju (@ki_young_ju) April 8, 2024

Approximately every four years, or after the mining of approximately 210,000 blocks, an event called the bitcoin halving occurs. During this event, the reward given to miners for verifying transactions is reduced by half. This reduction in reward, in turn, influences the price of Bitcoin and alters miner behavior. With expenses doubling to maintain their previous income, miners must adapt to continue earning the same amount of Bitcoin.

Starting from May 2020, following the Bitcoin halving, the mining profitability for each coin surpassed $30,000. Currently, as of April 10, the typical expense for Bitcoin mining amounts to $51,911.

Bitcoin Mining Profitability Post-Halving Relies On Price at $80,000

Despite the May 2020 halving influencing BTC‘s price to hit a record high of $70,000, the cost has risen above $72,000 prior to the upcoming halving. Currently, Bitcoin’s price is over $69,000 as we speak.

After the Bitcoin halving in April 2020, the typical expense of Bitcoin mining is projected to exceed $80,000. For miners to turn a profit, the price of Bitcoin must surpass this amount.

Previously, the cost of Bitcoin has typically risen significantly following a halving event. For instance, in 2012, the price jumped from its previous level to $1,162, representing an impressive increase of around 9,000%. The same trend continued after the 2016 halving when Bitcoin’s value soared by roughly 4,200% to reach $19,800. Likewise, following the most recent halving in 2020, the price of Bitcoin experienced a substantial increase of around 683%, reaching $69,000.

Bitcoin Mining Profitability Post-Halving Relies On Price at $80,000

In spite of worries that mining operations might shut down following each Bitcoin halving, miners have persisted in earning a profit. However, older Bitcoin mining machines may become obsolete due to these events, as their hashing power falls short of the heightened demand in the market.

After a Bitcoin halving, there’s a period when the Bitcoin price fails to cover the cost of mining it. This stage is characterized by instability, a frenzy of selling mining equipment, and challenges for smaller miners dealing with recurring difficulties.

Read More

2024-04-10 09:40