Galaxy Digital analysts predict a potential 20% drop in the network hash rate due to the upcoming Bitcoin halving in April.
Analysts expect the halving to impact eight specific mining machine models and cause the network’s hash rate to decline.
The halving will see mining rewards per block drop from 6.25 to 3,125 Bitcoin, prompting miners to seek greater efficiency and cost reductions to mitigate the impact of lower rewards. The current hash rate is around 515 exahashes per second (EH/s).
The affected models were identified in a report published on Wednesday.
We estimate that around 15-20% of the network hashrate at the end of 2023 (86-115 EH) could be offline at the time of the halving. Based on our analysis, we expect the network hashrate to be in a range between 675 EH and 725 EH in 2024. pic.twitter.com/a6F6lrUQ7s
– GG 🇨🇵⚡⛏️ (@GuerillaV2) February 15, 2024
This forecast is based on an analysis taking into account the new block subsidy, transaction fees accounting for 15% of rewards, and a Bitcoin (BTC) price of $45,000, with the current price at around $52,000.
The analysis also took into account future electricity prices and costs of public miners. The variance in hash rate is attributed to the sensitivity of the break-even points of these ASIC models to fluctuations in Bitcoin price and transaction fees.
The report suggests that miners with older, less efficient machines may use custom firmware to improve ASIC efficiency or sell their equipment to miners with lower electricity costs.
Compass Point Research & Trading, via senior analyst Chase White, expects a slightly smaller decline in hash rate to an average of 500 EH/s in May, compared to a forecast 565 EH/s in April, considering an average Bitcoin price of 55,000 US dollar before the halving and an expected increase to $57,500 after.
Expectations of a halving and market recovery in the second half of 2023 have led to significant investments in mining infrastructure, with companies such as Riot Platforms and Bitfarms expanding their mining capabilities through large purchases of mining equipment.
“We believe miners will do well with little or no debt, lower quartile electricity costs and efficient mining fleets,” White said. “Although we certainly expect it to be painful for everyone, especially early on as miners on the edge of profitability try to wait each other out before shutting down.”
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.