Bitcoin miners try to earn more before ‘halving’

by nativetechdoctor

According to Reuters, the gloomy situation of the cryptocurrency industry is gradually passing, mining companies are racing to lock in profits before the Bitcoin (BTC) halving takes place – a process that causes the reward for miners to decrease by a small amount. half to control Bitcoin’s inflation rate, this event takes place about every 4 years.

There are currently 19 million Bitcoins that have been mined, equivalent to 90% of the supply. The next “halving” is expected to take place in April 2024. Analyst at brokerage firm BTIG Gregory Lewis said people are rushing to restock Bitcoin miners ahead of the event.

According to , Bitcoin’s hashrate has skyrocketed to an all-time high. This means miners need more power and faster solving speed than before to earn a Bitcoin.

Analysts at JP Morgan estimate hashrate hitting record highs for 11 consecutive months, including a sharp increase in October 2023.

However, mining still cannot be as profitable as Bitcoin’s heyday in 2021.

A measure of miners’ income from using 1 petahash per second of computing power in a day has increased to more than $81, from $70 in early November but remains well below the peak of $127 in early November. May, according to Hashrate Index.

With six months to go until the next halving, Bitcoin miners are looking to protect profits in an increasingly competitive environment.

Mining company Sazmining CEO William Szamosszegi said that halvings will cause miners who cannot afford to invest to leave the game.

In the past, Bitcoin prices often increased sharply after each halving. Six months after the first halving in 2012, the price of Bitcoin went from $12 to $126. The second halving in 2016 saw Bitcoin increase from $654 to $1,000 within seven months. In 2020, Bitcoin price also increased from $8,570 to $18,040.

The third halving in 2020 lowered the miner reward to 6.25 Bitcoin per block, so it will drop to 3,125 Bitcoin in April 2024. Currently, mining each block will bring in 231,250 USD.

Analyst at digital asset investment firm Fineqia International Matteo Greco said many Bitcoin mining companies are upgrading equipment and increasing hashrate power to stay competitive. To preserve their profit margins, some players have shifted operations to Central American countries, where mining costs are affordable and governments are more friendly to cryptocurrencies.

Portfolio manager at Criptonite Asset Management Ludovic Thomas said it is still too early to conclude that Bitcoin miners have overcome the difficult times. He noted that increasing profits often go hand in hand with increases in Bitcoin hashrate and mining difficulty.

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