The upcoming Bitcoin halving in mid-April is expected to significantly impact the cost of mining using Antminer S19 XPs. According to CryptoQuant CEO Ki Young Ju, the current cost of mining will double from $40,000 to $80,000 after the halving event. The halving occurs every four years and reduces the block reward earned by miners by half. This event not only affects the price of Bitcoin but also has a significant impact on miner behavior, as they now have to spend twice as much to earn the same amount of BTC.
After the previous halving in May 2020, the cost for miners to continue mining profitably increased to over $30,000. However, during the same cycle, the price of BTC reached a new all-time high of $69,000. Currently, the average mining cost for Bitcoin is $49,902, with the BTC price above $70,000. However, after the upcoming halving, mining costs are expected to rise above $80,000. For miners to remain profitable, the BTC price must trade higher than this new cost.
Historically, the price of BTC has experienced significant jumps after each halving. Following the 2012 halving, the price increased by approximately 9,000% to $1,162. After the 2016 halving, the price surged by about 4,200% to $19,800. And after the 2020 halving, the price rose by almost 683% to $69,000.
Despite concerns of going out of business, miners have managed to remain profitable after each halving. However, many mining machines become obsolete as they can’t keep up with the high demand for hashing power. There is typically a period after each halving when the BTC price remains below the miner’s profitable price, leading to increased uncertainty and the selling off of mining rigs. This often results in small and lone miners going out of business.
However, as the demand for Bitcoin increases due to the declining market supply, the price usually picks up and surpasses the average mining costs, making mining profitable once again.