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Mining Bitcoin costs money, and it's getting pricier for miners considering the most recent reward halving. CoinShares tells us it's about $53,000 to mine one Bitcoin these days, and that's an average that large mining companies spend on one BTC.
For those who don't know, halving means miners get half the Bitcoin they used to get for decoding blocks that contain data about the Bitcoin network. Because they'll be getting less Bitcoin, what it costs to run their mining machines, mostly the electricity, could feel like it's doubled.
And there's more: experts think the total power of Bitcoin mining might jump up to 700 Exahash by 2025. A whole lot more power will be needed to run the Bitcoin network. But right after the halving, some less profitable mining machines might get turned off, dropping that number by about 10%.
There's a bright side, though. Some smart miners are moving to places where they can get cheaper, often wasted energy, like gas that would be burned off anyway. And they're starting to use AI to make more money in countries where energy is stable and not so expensive. This could be a game-changer that would fuel the network in the foreseeable future.
So, after the halving, the cost of mining a Bitcoin could go even higher. The miners' bills for things like electricity and the machines themselves might almost double on paper, while the price for Kw/h stays the same. They're trying to deal with this by getting better deals on their gear and finding cheaper power.
They're using extra cash from the bullrun and cheap mining cost to pay off debts and getting ready for a shift in the miners' market.