By
Godfrey Benjamin
April 29th, 2024
Recent reports suggest that BTC miners could face losses to the tune of $10 billion after Bitcoin halving 2024 as mining rewards drop and mining costs increase.
With just five days left ahead for the fourth Bitcoin halving, BTC miners could be preparing for a major dump going ahead. In a recent research note, Markus Thielen, the head of research at 10x Research, stated that Bitcoin miners could potentially sell off a staggering $5 billion worth of Bitcoin after the halving event 2024.
“The overhang from this selling could last four to six months, explaining why Bitcoin might go sideways for the next few months – as it has done following past halvings,” he added. Historically, the Bitcoin prices have remained range-bound for months together following the halving event.
Thielen believes that a similar situation could pan out ahead with the crypto markets potentially facing “a significant challenge in a six-month ‘summer’ lull”. Thus, with the Bitcoin halving 2024 scheduled on April 20, we may not see any upward potential trajectory in the BTC price until October this year.
On the other hand, miners continue to stock up their BTC supplies ahead of the halving with an exactly similar situation panning out this time as well! We have already witnessed strong miner accumulation during the past few months as the Bitcoin price rallied 74% this year hitting an all-time high of $73,734.
In his research report, Thielen stated that the world’s largest Bitcoin miner Marathon Digital has built enough inventory to sell after the Bitcoin halving event. This would prevent the Bitcoin miner from preventing any kind of “revenue cliff”.
With Marathon’s current production of 28-30 BTC per day, this could mean an additional 133 days of supply entering the market, in addition to the BTC they generate. Following the halving, their production would decrease to 14-15 BTC per day. “Other miners will likely follow a similar strategy to liquidate part of their inventory gradually,” said Thielen.
Bitcoin Miners to Face $10 Billion in Losses
Another report suggested that Bitcoin miners could face losses to the tune of $10 billion after the fourth Bitcoin halving event. The upcoming Bitcoin halving will reduce the daily reward for miners validating transactions from 900 to 450 BTC.
Considering Bitcoin’s present value, this adjustment could lead to a revenue drop of $10 billion annually to the Bitcoin mining industry. To offset this loss, top players like Marathon Digital and CleanSpark are investing in new equipment and acquiring smaller competitors. Speaking of the development, Matthew Kimmell, a digital asset analyst at CoinShares said:
“This is the final push for miners to squeeze out as much revenue as they can before their production takes a big hit. With revenues across the board decreasing overnight, the strategic response of each miner, and how they adapt, could well determine who comes out ahead and who gets left behind.”
Some market players are also anticipating that following the Bitcoin halving event, stocks of BTC mining firms will also collapse.