The Bitcoin halving, scheduled for April, will reduce the block reward by half, rendering approximately one-fifth of mining rigs unprofitable.
According to a Galaxy Digital report, the Bitcoin network’s hashrate increased by 104% in 2023. Around 70% of the hashrate came from eight models of ASIC miners. Analysts estimate that the upcoming halving will make about 20% of BTC mining rigs unprofitable.
Galaxy Digital analysts suggest that miners using outdated equipment will have to shut down after the halving. Machines such as Bitmain S9, Canaan A1066, and MicroBT M32 will become unprofitable for mining Bitcoin. Additionally, analysts project that the reward reduction will lead to the shutdown of about half of the MicroBT M20S and Bitmain S17 mining device models. In 2024, Bitcoin’s hashrate may decrease by approximately 86-115 EH, ranging from 675 EH to 725 EH.
In 2023, Bitcoin miners experienced income volatility due to strong fluctuations in transaction fees. Notably, the Ordinals protocol contributed to a more than fourfold increase in network transaction fees in 2023 compared to 2022. About 23,445 BTC was spent on fees, including around 5,000 BTC from Ordinals-related transactions. In contrast, transaction fees on the Bitcoin network totaled 5,375 BTC in 2022.
BTC miners also face pressure from the growing difficulty of mining Bitcoin. BTC.com reports that the mining difficulty reached a record 81.73 trillion and continues to increase by an average of 6% per month. This trend may lead to the shutdown of some mining rigs post-halving as profitability declines.
Last year, mining investment giant BlackRock expressed interest in Bitcoin mining, investing $411 million in major mining companies. What’s more, Tether allocated $500 million to construct its own mining facilities.
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