coinculture.com
According to analysts at Cantor Fitzgerald, eleven major publicly traded Bitcoin miners might face challenges in maintaining profitability post-halving if the price of BTC does not see a significant rise. CleanSpark’s Matthew Shultz shared Cantor Fitzgerald’s research on January 25, highlighting concerns for miners like Marathon Digital, Riot Platforms, and Core Scientific, whose operational costs might surpass the value of the Bitcoin they mine.
*BREAKING – new today!
No matter the department, the entire team at @CleanSpark_Inc is committed to efficiency. EFFICIENCY of Uptime, Equipment, Capital, Operations, Community Engagement, Energy, Strategy, Growth, and other metrics.
Today’s brand new report from the research… pic.twitter.com/YgQ6XrIXh2
— S Matthew Schultz (@smatthewschultz) January 25, 2024
While Bitcoin miner revenues heavily depend on BTC price fluctuations, Luxor’s executive notes that miners often use strategies to mitigate potential losses from price volatility. Among the miners analysed, UK-based Argo Blockchain and Florida-based Hut 8 are projected to face the most profitability issues post-halving, with estimated “all in” costs per coin of $62,276 and $60,360, respectively.
As of their January 5 update, Hut 8 reported holding 9,195 BTC, valued at $377 million at current rates. Cantor analysts suggest that only Bitdeer and CleanSpark may sustain profitability post-halving, assuming an average BTC price of $40,000 and stable hash rates.
The term “all in per coin” refers to the total expenses incurred by miners to produce one Bitcoin, encompassing electricity costs, hosting fees, and other expenses. The Bitcoin halving, scheduled for April, entails cutting mining rewards in half, which some see as bullish for Bitcoin’s long-term price, but it poses challenges for miners with high operational costs, especially if BTC prices do not rise sufficiently to cover these costs.
Market analysts anticipate a significant price surge for Bitcoin in the months following the halving. Luxor’s Dan Rosen mentions that miners often employ various hedging strategies, such as purchasing derivative products like hash rate futures contracts and BTC-related options, to manage BTC exposure and smooth out potential volatility.