Crypto market

How will the cost of mining Bitcoin change after the halving?

11 March 2024

The Bitcoin halving is set to occur in April this year, as a result of which the cost of mining BTC could rise to $53,000 from the current $26,500. This is due to the fact that the miners’ reward per block will be halved: from 6.25 to 3.125 BTC. 

Analysts expect further consolidation of the Bitcoin mining industry. It is likely that some miners will leave the market, that is, they will disconnect their devices from the Bitcoin network, resulting in a decrease in the overall hash rate. This forecast is shared by Lucas Pipes from B. Riley Financial and Colin Harper from Luxor Mining: as early as August last year, experts suggested that after the halving, the Bitcoin network’s hash rate would decrease by 30%.

According to analysts from Galaxy Digital, this figure could fall by 20%, as the halving will negatively affect miners’ profitability, and the market will be mainly dominated by large players with modern mining farms.

In such a scenario, the cost of mining could drop to $42,000 with an average electricity cost of $0.05 per kWh, according to JPMorgan. Additionally, this could be related to the shutdown of outdated mining equipment such as the Antminer S9 and Whatsminer M32, whose profitability continues to decline. 

Traders and investors use this data to estimate the potential bottom price of Bitcoin. As practice shows, after each halving, if the price of BTC does fall below the estimated cost of mining the cryptocurrency, it is only slight and short-lived. Therefore, analysts consider $42,000 as the projected global support level for the price of Bitcoin. 

We will keep an eye on the situation and inform you about significant changes in the mining market.