According to analysts at Cantor Fitzgerald, eleven of the largest publicly traded Bitcoin miners may face profitability challenges if the price of Bitcoin (BTC) does not experience a significant increase following the upcoming halving event.
CleanSpark’s executive chairman and co-founder, Matthew Shultz, shared this research on January 25th, highlighting concerns for miners like Marathon Digital, Riot Platforms, and Core Scientific, as their mining operations may no longer cover their costs.
While Bitcoin miner revenues are closely tied to BTC’s price, Luxor’s executive emphasized that miners often employ strategies to mitigate potential losses from price volatility.
Nevertheless, Cantor Fitzgerald’s assessment suggests that, at the current BTC price, UK-based Argo Blockchain and Florida-based Hut 8 could be the most vulnerable post-halving, with an “all in” cost-per-coin rate of $62,276 and $60,360, respectively.
Hut 8 reported in its January 5th update that it held 9,195 BTC, worth $377 million at current prices.
Cantor analysts only expected Singapore-based Bitdeer and US mining firm CleanSpark to maintain profitability following the halving, assuming an average BTC price of $40,000 and no drastic changes in hash rate.
The “all in per coin” metric takes into account all costs incurred in producing a single Bitcoin, including electricity and hosting fees.
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The Bitcoin halving, scheduled for April, involves cutting mining rewards in half, potentially impacting miners with high operational costs.
If BTC’s price does not cover these costs, their situation could worsen.
However, many market experts believe that the halving could drive a long-term increase in BTC’s price, which would alleviate this concern.
Dan Rosen, associate director of derivatives at Bitcoin miner Luxor, explained that miners often employ various strategies to hedge against BTC price fluctuations, such as purchasing derivatives products like hash rate futures contracts and BTC-related options.
Cointelegraph attempted to contact several Bitcoin miners mentioned in the report for comment, but no immediate responses were received.
The fate of these miners will depend on BTC’s post-halving price performance and their ability to manage operational costs in an evolving market.
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