The Bitcoin (BTC) market has been on a wild ride lately and reached one new all-time high (ATH) before experiencing notable volatility that resulted in an 8% decline to $65,500 on Friday.
Meanwhile, Marathon Digital, one of the largest US-based Bitcoin mining companies, is preparing to acquire more energy infrastructure and streamline operations to address challenges arising from a decline in revenue due to the coming April Halving event.
Bitcoin miners are preparing for a post-halving market shakeout
According to Bloomberg reportMarathon Digital plans to acquire additional energy infrastructure and expand its mining capacity to keep costs down and maintain profitability.
By optimizing operations and scaling, Marathon aims to mitigate the impact of the impending decline in sales and secure larger margins in the post-halving situation.
Marathon Digital recently announced an agreement to purchase a 200-megawatt data center in Garden City, Texas, for over $87 million. This acquisition represents the company's second major investment in energy infrastructure, following its acquisition of multiple sites for $179 million earlier this year.
By increasing his property Mining capacity Bloomberg notes that Marathon is seeking greater operational and cost efficiency by increasing its infrastructure share to 53%, up from a meager 3% last year.
However, the Bitcoin mining industry is expected to undergo significant changes after the halving as some miners will face profitability issues and possible exits.
Profitability crisis looms
Marathon Digital CEO Fred Thiel highlights the impact of the decline in sales, estimating that the industry's average break-even point will rise from around $23,000 per Bitcoin to around $43,000. Thiel explained:
After the halving, there will be some miners who will lose profitability, may be challenged, or may be looking for an exit as their revenue will decrease due to the decreasing Bitcoin reward. The simple math is that if the industry's average break-even point was around $23,000 per Bitcoin, it will now rise to around $43,000.
It is worth noting that this does not necessarily mean that the price of Bitcoin will decline from its current trading price of $69,300 to $43,000. The Breakeven price refers to the price at which miners like Marathon Digital can cover their operating costs and achieve profitability. There is no direct connection with the market price of Bitcoin.
The daily chart shows that BTC price recovered to the $69,000 level after falling to $65,500. Source: BTCUSD on TradingView.com
At the time of writing, BTC is trading at $69,300 and is on the verge of reclaiming the significant milestone of $70,000. The cryptocurrency saw a significant increase in volatility in the early hours of Friday's trading session, but has since recovered and pared its losses from 8% to 2.5%.
Featured image from Shutterstock, chart from TradingView.com
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