Bitcoin experiences a 20% decline, say experts in the field of Galaxy analysis.
Analysts at Galaxy Digital have predicted a potential 20% decrease in the network hash rate as a result of the upcoming Bitcoin halving in April. This reduction in hash rate will specifically impact eight mining machine models. The halving will lead to a decrease in mining rewards per block from 6.25 to 3.125 bitcoin, prompting miners to seek greater efficiency and cost reduction in order to mitigate the impact of lower rewards. Currently, the hash rate stands at approximately 515 exahashes per second (EH/s).
The report, which was released on Wednesday, identified the specific models that will be affected by the halving. The analysts arrived at this projection based on an analysis that took into account the new block subsidy, transaction fees accounting for 15% of rewards, and a Bitcoin price of $45,000 (compared to the current price of around $52,000).
The analysis also considered future power prices and costs from public miners. The fluctuations in hash rate are attributed to the sensitivity of the breakeven points for these ASIC models to changes in the price of bitcoin and transaction fee proportions.
The report suggests that miners with older and less efficient machines may opt to use custom firmware to enhance the efficiency of their ASICs or sell their equipment to miners with lower power costs.
Compass Point Research & Trading, represented by senior analyst Chase White, expects a slightly smaller decline in hash rate, projecting an average of 500 EH/s in May compared to the projected 565 EH/s in April. This projection takes into account an average bitcoin price of $55,000 before the halving and an expected increase to $57,500 afterward.
The anticipation of the halving and a potential market rebound in the second half of 2023 has led to significant investments in mining infrastructure. Companies like Riot Platforms and Bitfarms have expanded their mining capabilities through substantial purchases of mining equipment.
“We believe that miners who have low or no debt, bottom quartile power costs, and efficient mining fleets will be able to weather the storm,” said White. “However, we do expect there to be challenges for everyone, especially in the early stages, as miners on the brink of profitability try to outlast each other before shutting down.”
Read more:
Next Bitcoin halving just 15k blocks away
Follow Us on Google News
