Odaily News: The next Bitcoin halving is expected to occur in April 2024, at which point the block reward will be reduced from 6.25 BTC to 3.125 BTC.



Cryptocurrency supporters believe that this increased scarcity of supply will help maintain the long-term value of Bitcoin, or at least sustain its value until the maximum limit of 21 million coins is reached around 2140. So far, Bitcoin prices have rebounded after each halving, and advancements in technology have improved mining efficiency, allowing miners to offset the decrease in rewards.



However, Jaran Mellerud, a mining analyst at Hashrate Index, predicts that nearly half of the miners will be affected due to low mining efficiency and high costs. The breakeven electricity price for the most common mining machines is expected to decrease from $0.12 per kilowatt-hour to $0.06 per kilowatt-hour after the halving. Nonetheless, approximately 40% of Bitcoin miners have operating costs higher than $0.06 per kilowatt-hour. Mellerud adds that miners with operating costs higher than $0.08 per kilowatt-hour will struggle to survive, including small miners who outsource their mining equipment.



Wolfie Zhao, the research director at BlocksBridge's research division, TheMinerMag, states that when considering all factors, the total costs for some miners are much higher than the current price of Bitcoin. For many miners with lower operational efficiency, their net profits will turn negative.



Ethan Vera, the Chief Operating Officer of Luxor Technologies, estimates that the global mining industry's debt has decreased from $8 billion in 2022 to around $4.5-6 billion, including senior debt, mining equipment mortgages, and Bitcoin-backed loans.



According to data from Hashrate Index, outstanding loans for 12 major publicly listed mining companies (such as Marathon Digital Holdings and Riot Platforms) were approximately $2 billion at the end of the first quarter, lower than the $2.3 billion in the fourth quarter of last year.



Kevin Zhang, the Senior Vice President of Mining Strategy at Foundry, a cryptocurrency mining company under Digital Currency Group, states that in order for miners to maintain the same profit margin after the halving, the price of Bitcoin must rise to $50,000 to $60,000 next year.



In a report released on June 1, JPMorgan strategists wrote that the halving is expected to eventually double the production cost of Bitcoin to around $40,000. According to data from TheMinerMag, the average cost for publicly listed mining companies to mine one Bitcoin in the first quarter of this year ranged from $7,200 to $18,900. Tiffany Wang, a Bitcoin miner at Lotta Yotta, points out that these calculated costs do not include other major expenses such as debt interest payments, management salaries, or marketing. Wang notes that while everyone needs to be prepared for the halving, many miners will ultimately be pushed out of the market. (Bloomberg)