Bitcoin mining profitability is expected to remain stable after the upcoming Bitcoin halving, despite a 50% reduction in BTC supply issuance, according to Laurent Benayoun, CEO of Acheron Trading. The halving, which is set to take place on April 20, will decrease block issuance rewards from 6.25 BTC to 3.125 BTC. In previous halvings, smaller mining firms were unable to sustain their operations due to the decrease in block rewards. However, Benayoun believes that this time will be different due to the rise in network fees driven by Ordinals inscriptions and BTC-native decentralized finance (DeFi), or BTCFi. Network fees are transaction fees paid to incentivize miners to include transactions in the next block. Currently, average Bitcoin transaction fees are at $4.88 per transaction, down from $16.13 per transaction a month ago. However, these fees have increased by over 86% in the past year. Benayoun predicts that as long as the price of Bitcoin remains above $70,000, mining companies will remain profitable. Joe Downie, CMO of NiceHash, adds that a mining firm’s profitability also depends on the quality and energy efficiency of its mining equipment. Despite fluctuations in Bitcoin’s price, Benayoun believes that fewer mining firms will be forced out of business compared to previous cycles, thanks to Bitcoin’s price appreciation and the increasing network fees.
Profitability of Bitcoin mining may not decrease following halving