Bitcoin miners are finding it difficult to make money, according to Cantor Fitzgerald.

Cantor Fitzgerald report raises concerns that 11 major Bitcoin miners may face unprofitability after upcoming halving event at current market price.

Hongji Feng Last updated: January 26, 2024 02:59 EST | 1 min read

Source: DALL·E

Bitcoin mining is getting less profitable as many publicly traded miners might face potential profitability challenges following the next Bitcoin halving event.

According to a recent report by Cantor Fitzgerald, 11 major mining companies, including Marathon Digital (MARA), Riot Platforms (RIOT), and Bitfarms (BITF), would struggle to make a profit post Bitcoin halving in April 2024.

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Non Profitable Mining Business Post Halving

The report analyzed the “cost-per-coin” of the companies post halving with the steady Bitcoin price set at $40,000. Of all the 13 companies, only two were estimated to maintain their profit margins. Bitdeer (BTDR) mines each coin at the lowest cost of $17,744, while CleanSpark (CLSK) keeps the cost-per-coin just below the $40,000 level at $36,896.

Meanwhile, Argo Mining (ARBK) and Hut 8 Mining (HUT) were listed with the highest costs, each calculated at $62,276 and $60,360 respectively.

Cantor Fitzgerald stated that their research “reflects all the costs that a Bitcoin miner would incur in producing a single Bitcoin, including both electricity costs/hosting fees and other cash expenses.”

Responding to Cantor’s report, CleanSpark executive chairman Matthew Shultz expressed in a post that the key to CleanSpark’s low cost is efficiency.

Source

“No matter the department, the entire team at CleanSpark is committed to efficiency,” said Shultz. “EFFICIENCY of Uptime, Equipment, Capital, Operations, Community Engagement, Energy, Strategy, Growth, and other metrics.”

Arthur Hayes: Bitcoin to Find Support in $30,000~$35,000

Though the analysis established the price benchmark at $40,000, it is trading at $39,932 at the time of writing, down by 0.28% in the past 24 hours according to CoinMarketCap.

In addition, BitMEX founder Arthur Hayes has predicted Bitcoin to continue to drop and eventually find support in the range of $30,000 to $35,000.

In his blog post, Hayes stated that he has purchased a Bitcoin put option with a strike price of $35,000 with an expiration date of March 29.

“I think Bitcoin will find a local bottom between $30,000 and $35,000,” said Hayes.

Hayes also speculated that the U.S. Department of Treasury Secretary Janet Yellen could have an impact on Bitcoin’s market performance.

Q&A: Q: What is Bitcoin halving? A: Bitcoin halving is an event that occurs approximately every four years, where the number of bitcoins generated per block is halved. This event has a significant impact on the mining industry and potentially affects the profitability of miners.

Q: How does the cost-per-coin affect mining profitability? A: The cost-per-coin is an essential metric in determining mining profitability. If the cost-per-coin is higher than the market price of Bitcoin, miners will face challenges in making a profit. Lowering the cost-per-coin through efficient operations and infrastructure is crucial for maintaining profitability.

Q: What factors contribute to mining costs? A: Mining costs include electricity costs, hosting fees, equipment expenses, and other cash expenses. These costs can vary depending on factors such as the location of mining operations, energy prices, and the efficiency of mining hardware.

Q: What is the potential impact of Arthur Hayes’ prediction? A: Arthur Hayes’ prediction of Bitcoin finding support in the $30,000 to $35,000 range suggests a potential further drop in Bitcoin’s price. This could lead to a shift in market sentiment and affect the strategies of traders and investors.

Future Outlook:

Looking ahead, the profitability of Bitcoin mining will continue to be a topic of concern and discussion. As the halving events occur, miners will need to find ways to improve efficiency and reduce costs to remain profitable. The ongoing advancements in mining technology and the adoption of renewable energy sources could potentially address some of these challenges.

It is also important to closely monitor the market performance of Bitcoin and its interactions with external factors. The impact of regulatory frameworks, institutional adoption, and global economic conditions can significantly influence Bitcoin’s price and adoption.

For investors, diversification and thorough research remain important strategies. Investing in a mix of cryptocurrencies, blockchain-related stocks, and other digital assets can help mitigate risks and take advantage of opportunities in this rapidly evolving market.

References:

1. Tax Revenue from Cryptocurrency Mining Modest but Growing in Kyrgyzstan
2. Bitcoin Halving 2024: Miners Predict Potential Outcomes of Reduced BTC Rewards
3. Arthur Hayes Predicts Bitcoin Price to Experience Massive Correction in Early March
4. Spot BTC ETF Could Reach $3 Billion in Initial Post-Launch Days of Trading, Broker Says
5. Follow Us on Google News

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