New data released by Hashlabs Mining reveals that the United States accounts for 40% of Bitcoin (BTC) mining. However, experts in the industry predict that the upcoming halving event may lead to U.S. miners moving their operations offshore.
Raphael Zagury, the chief investment officer at Swan Bitcoin, a financial services company focused on Bitcoin, told Cointelegraph that the halving will have a significant impact on U.S. miners, cutting their revenue in half. Zagury stated that this event will act as a filter, distinguishing between efficient and profitable miners and those who are less capable.
The next halving is scheduled for April and will reduce the Bitcoin mining reward from 6.25 BTC to 3.125 BTC. This reduction in mining rewards will affect miners worldwide, but regions with a large number of miners will face the biggest challenges.
Haris Basit, the chief strategy officer at Bitdeer, a publicly traded mining service provider, explained that his company has been preparing for halving events for years to ensure efficient operations. Bitdeer prioritizes low electricity costs to maintain profitability. Basit stated that Bitdeer regularly publishes its power costs and has one of the lowest electricity costs in the industry. The company is continuously working on lowering energy costs with ongoing efforts that will have a significant impact in the future.
Basit further explained that the impact of the halving on Bitdeer’s operations in the United States depends on the price of Bitcoin at the time of the event. The Bitcoin network’s hash rate, which measures the total computational power used by miners, has been steadily increasing. However, the decrease in block rewards combined with the high energy usage required for mining may lead to miners going offline after the halving.
Jamie McAvity, the CEO of Cormint Data Systems, a Bitcoin mining company based in Ft. Stockton, Texas, mentioned that approximately 50% of mining computers currently have an efficiency between 30 and 40 joules per terahash. McAvity explained that if the halving were to occur today, many of these computers would no longer be able to mine profitably due to the required electricity cost.
McAvity also anticipates difficulty adjustments following the halving. He believes that there will be little hash rate growth throughout the summer of 2024, as lower mining breakevens will coincide with peak summertime electricity demand and high prices.
Despite the challenges posed by the halving, experts still believe that Bitcoin’s global hash rate will increase. Zagury noted that the hash rate has shown resilience and growth throughout history, apart from significant events like China’s mining ban in May 2021. McAvity remains optimistic and expects an all-time high in hash rate after October 2024.
Basit mentioned that Bitdeer plans to build over one gigawatt of new facilities in the next 24 months. These expansions, along with improved mining rig efficiency, will contribute to significant growth in the global hash rate. However, Basit emphasized that the price of Bitcoin would need to rise to support such increases.
In conclusion, the upcoming halving event presents challenges for miners, but experts believe that the global hash rate will continue to increase in the long term. The impact of the halving on miners’ profitability will depend on various factors, including the price of Bitcoin and the efficiency of their operations.