Eleven BTC miners who will not be profitable after the halving process
The Bitcoin halving could be a severe blow to BTC miners with high operating costs. Analysts at financial services firm Cantor Fitzgerald have reportedly found that eleven of the largest publicly traded bitcoin miners BTC miners could struggle to mine bitcoin profitably if the cryptocurrency’s price does not increase significantly after the halving.
UK-based mining company Argo Blockchain (ARBK) and Florida-based miner Hut 8 Mining were flagged as the most potentially unprofitable after halving at the current bitcoin price, with a total cost per currency of $62,276 and $60,360 respectively.
In its latest update on BTC miners on January 5, Hut 8 reported that its total reserves amounted to 9,195 BTC, worth $377 million in current prices.
The only companies that Cantor analysts expected to remain profitable after the halving, assuming an average price of $40,000 per bitcoin and no drastic changes to the hash rate, were Singapore-based miner Bitdeer and mining company US; CleanSpark.
Cantor’s “all-in per coin” metric, which refers to the total costs that a BTC miner would incur to produce 1 BTC, including electricity costs, hosting fees and other out-of-pocket expenses.
The bitcoin halving, currently scheduled for April, refers to the halving of block rewards for bitcoin miners.
While many market experts see this reduction in supply as bullish for the price of bitcoin in the long term, it also means that miners with high operating costs could suffer. This would only get worse if the price of bitcoin does not reach a level that covers these costs.
Many market commentators also believe that bitcoin will see a significant price increase in the months following the halving.
It is worth noting that although bitcoin miners’ earnings are closely linked to the price of the cryptocurrency, miners often use strategies to hedge potential losses due to price volatility.
BTC miners typically use a variety of strategies to hedge their exposure to BTC. This often looks like buying derivative products, such as hash rate futures and BTC-related options, to try to smooth out any volatility.
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