The upcoming Bitcoin halving in mid-April is set to double the cost of mining using Antminer S19 XPs, according to data from CryptoQuant CEO Ki Young Ju. Currently priced at $40,000, the mining cost will rise to $80,000 after the halving event.
The Bitcoin halving is a significant milestone that occurs approximately every four years, or after every 210,000 blocks. During this event, the block reward earned by miners is cut in half, which not only indirectly impacts the price of Bitcoin but also significantly affects miner behavior. Miners will 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 exceeded $30,000. However, during the same cycle, the price of BTC surged to a new all-time high of $69,000. Currently, the average Bitcoin mining cost is $49,902, with the BTC price above $70,000. However, after the upcoming halving on April 20, the average mining costs will rise above $80,000. To remain profitable, miners will need the BTC price to trade higher than that.
Historically, BTC prices have experienced significant increases after each halving. Following the 2012 halving, the price of Bitcoin soared by approximately 9,000% to reach $1,162. Similarly, after the 2016 halving, the price increased by about 4,200% to $19,800. After the most recent halving in 2020, the price rose by nearly 683% to $69,000.
Despite concerns about going out of business after each halving, miners have managed to remain profitable. However, halving events render many mining machines obsolete as they struggle to compete with the high demand for hashing power.
Typically, there is a period after each halving when the BTC price falls below the miner’s profitable price. This uncertain period often leads to increased selling of mining rigs and the closure of many small and individual mining operations. However, as market demand increases due to declining supply, the price of BTC usually surpasses the average mining costs, leading to profitability for miners.
In conclusion, the Bitcoin halving has a significant impact on mining costs and miner behavior. While the upcoming halving will double the cost of mining, historical data suggests that BTC prices tend to soar after each halving, providing profitability for miners in the long run.