Analyst: Bitcoin halving may lead to negative net profit of miners

According to analysis, the next Bitcoin (BTC) halving will occur in April 2024, which may make miners' profits fall into the red. HashrateIndex cryptocurrency mining analyst Jaran Mellerud said that nearly half of Bitcoin miners are not operating at optimal levels of efficiency. Therefore, these miners are likely to be stuck after the next halving. The breakeven electricity price for the most common miners after the halving is expected to drop from $0.12/kWh to $0.06/kWh. However, about 40% of BTC miners have an operating cost per kWh higher than $0.06/kWh. Therefore, miners with operating costs above $0.08/kWh and those without mining rigs may be severely affected by the halving. Wolfie Zhu, director of research at The Miner Mag, the research arm of mining consultancy Blocks Bridge, said that when everything is factored in, the total cost for some miners is much higher than bitcoin's current price. For many miners operating less efficiently, net profits will turn negative. Ethan Vera, chief operating officer of Luxor Technologies, estimates that the global mining industry’s debt has decreased from $8 billion in 2022 to about $4.5 billion to $6 billion currently, which includes senior debt, mining equipment collateral loans and Bitcoin-backed loans. Kevin Zhang, senior vice president of mining strategy at Foundry, a cryptocurrency mining company owned by Digital Currency Group, said that for miners to maintain the same profit margin after the halving, the price of bitcoin must rise to $50,000 to $60,000 next year.