Bitcoin halving event is typically a challenging period for the miners, yet those who operate based on energy-efficient models are more likely to keep operations profitable during that time, explain U.S. mining firms.
The upcoming Bitcoin halving event, scheduled for April 18 2024, is forcing miners to take all the appropriate measures to ensure the stability and profitability of their operations after the Bitcoin mining reward will decrease from 6.25 BTC to 3.125 BTC. It is predicted that many U.S. miners will be forced to relocate offshore but those who already focus on energy efficiency have more chances to stay afloat.
Haris Basit, chief strategy officer at Bitdeer, believes that energy efficiency is a key factor in maintaining the mining stability post-halving. In his interview with Cointelegraph, Basit explained that the firm has been preparing for halving events years in advance, prioritising low electricity costs in its profit preservation strategy. According to him, Bitdeer has one of the lowest costs of electricity in the industry and is constantly working on lowering this cost.
Last year, Bitdeer launched a new carbon-free digital asset mining location in Bhutan, powered by hydroelectric energy sources, which complements the firm’s international expansion, with existing data centers in Northern Europe and North America.
Jamie McAvity, CEO at Cormint Data Systems also believes that miners who face higher electricity costs risk going offline after the halving. He said: “If the halving were to occur today, many of these computers would no longer be able to mine profitably, as that would require an electricity cost of $.04/kilowatt-hour or lower.”
Cormint also has one of the lowest electricity costs in the industry. Besides, its mining fleet will flexibly respond to electricity pricing upon Bitcoin halving and only mine during profitable periods.
Raphael Zagury, chief investment officer at Swan Bitcoin financial services company, estimates that the upcoming halving will cut the revenues of U.S. miners in half. It won’t go unnoticed since 0% of Bitcoin mining occurs in the United States. “This acts as a great filter, distinguishing between efficient, profitable miners and those less capable,” Zagury noted.
At the same time, experts agree that such predictions hold true in the current crypto environment. “If Bitcoin rallies dramatically, it will create a strong mining incentive, and the halving may have very little impact on mining economics,” said McAvity. At present, Bitcoin is continuously increasing in halving anticipation. It has exceeded $63K today, illustrating a 22% growth over the last five days.
However, it is not too late for Bitcoin miners to work on their energy efficiency. Sustainable mining practices not only support the operations’ stability during the halving transition but also promote the global transition to renewable energy.
