New findings from Hashlabs Mining have revealed that 40% of Bitcoin (BTC) mining currently takes place in the United States. However, experts in the industry are predicting that the upcoming halving event may cause U.S.-based miners to move their operations offshore.
Raphael Zagury, the chief investment officer at Swan Bitcoin, a Bitcoin-focused financial services company, believes that the halving event will have a significant impact on U.S. miners, cutting their revenue in half. Zagury states that this will act as a filter, distinguishing between efficient and profitable miners and those that are less capable.
The next halving event 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 greatest challenges.
Haris Basit, the chief strategy officer at Bitdeer, a publicly traded mining service provider, explains that the halving event is one of the most predictable occurrences in the crypto industry. As a result, Bitdeer has been preparing for halving events years in advance to ensure efficient operations. Basit emphasizes the importance of low electricity costs for Bitdeer’s six worldwide mining facilities to remain profitable. They constantly work on lowering energy costs and have ongoing efforts that will make a significant impact in the future.
Basit further explains that the impact of the halving on Bitdeer’s operations in the United States depends greatly 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 rising since April 2021, according to data from BitInfoCharts. However, a decrease in block rewards combined with high energy usage may result in miners going offline after the halving. Basit states that the effect will primarily fall on mining operations with the highest costs, but if the Bitcoin price is substantially higher, the effect will be different.
Jamie McAvity, the CEO at Cormint Data Systems, a Bitcoin mining company based in Ft. Stockton, Texas, reveals that approximately 50% of mining computers currently have an efficiency between 30 and 40 joules per terahash. These computers would no longer be able to mine profitably if the halving were to occur today, as it would require a lower electricity cost.
McAvity expects there to be difficulty adjustments following the halving, as mining difficulty has steadily risen since January 2023. He believes that there will be little hash rate growth throughout the summer of 2024 due to lower mining breakevens, high electricity demand, and corresponding high prices.
Despite the challenges posed by the halving, experts still anticipate an increase in Bitcoin’s global hash rate. Zagury notes that the hash rate has shown resilience and growth throughout its history. McAvity is also optimistic, predicting an all-time high hash rate after October 2024. However, these predictions may only hold true in the current Bitcoin price environment.
Basit states that Bitdeer has planned over one gigawatt of new facilities in the next 24 months, which combined with improved mining rig efficiency, will lead to significant growth in the global hash rate. He also emphasizes the need for the price of Bitcoin to rise to support these increases.
Overall, experts believe that while the halving event may present challenges for miners, the long-term outlook for Bitcoin’s global hash rate remains positive.