Mining companies can increase diversification into the field of AI to compensate for the reduction in revenue after halving. This is the conclusion reached by CoinShares experts.
On April 20, on the bitcoin network at the height of #840,000, the reward for the found block decreased from 6.25 BTC to 3.125 BTC.
The programmed event occurs approximately once every four years every 210,000, negatively affecting the revenue of miners. It is assumed that gradually their main income should be transaction fees.
However, according to CoinShares cryptocurrency specialist Matthew Kimmell, despite the boom of Ordinals in recent months and the launch of the Runes protocol, the average amount of fees in revenue will be about 15%. Only on peak days, the indicator can reach 30%, the expert suggested.
"It is not at all obvious that the commissions fully compensate for the lost income. I don't really expect that to happen," Castle Island managing partner Nick Carter told CNBC.
CoinShares analyzed data from 14 mining companies, which together account for about 20% of the global bitcoin hashrate. After halving, the average cost of mining 1 BTC for these firms will be $ 53,000, experts estimated. At the same time, energy costs will more than double — from $16,300 to $34,900.
Data: CoinShares.According to analysts, the hashrate after halving will decrease by 10%, but by the end of the year it will reach 700 EH/s. However, a number of miners obviously do not achieve their stated goals of increasing capacity.
For example, Riot planned an indicator of 21 EH/s by the second quarter of 2024, but for about six months it remains at 12.4 EH/s. Bitfarms also intended to deploy 12 EH/s by April — since the beginning of the year, the hashrate has frozen at 6.5 EH/s. Bitdeer reported a reduction from 7.2 EH/s up to 6.7 EH/s.
In this situation, the entry of more efficient miner models into the market will be able to compensate for the falling profitability of mining, experts say. They also drew attention to a growing trend: industry participants are increasingly paying attention to computing for the field of artificial intelligence as a highly profitable activity. At Hive and Hut 8, the share of this business in revenue has already reached 3.6% and 2.9%.
Core Scientific provides hosting for high-performance computing (HPC) under a contract with Coreweave. TeraWulf and Bitdeer are actively increasing their respective capacities.
"Some data centers are located in close proximity to large metropolitan areas, which makes them candidates for using low-latency HPC," said Adam Sullivan, CEO of Core.
But the transition from mining to computing for AI is not so easy, CoinShares noted. The requirements for reliability of power supply and data transmission networks in the latter area are much higher.
Sullivan confirmed that few miners in North America will be able to repurpose their facilities for the needs of AI.
Industry players greeted the halving with restrained optimism
Riot CEO Jason Les noted that the approval of spot bitcoin ETFs in the United States contributed to the influx of new money into the cryptocurrency and its reaching new highs. He expects continued growth, as exchange-traded funds will also appear in Hong Kong soon.
According to him, the company was preparing for halving, seeking to reduce the cost of electricity, strengthening the balance sheet and scaling up its activities.
Regarding the growth of the hashrate, he explained that the new facility in Corsicana (Texas) was connected to the network only last week. Now the company will be able to increase bitcoin production with the help of efficient equipment of the latest generation.
Marathon CEO Fred Thiel spoke about a change in approach to business scaling — instead of updating the fleet, the company focused on infrastructure.
As a result of the acquisitions, if in December 2023 the company owned 5% of the facilities where the miners were located, then by April the figure had increased to 53%. This has reduced the cost of bitcoin mining by 20%.
Thiel noted that the company recently launched a project to generate energy from methane released in landfills. In fact, the division subsidizes the mining of the company, allowing you to reduce the cost. Marathon expects that the new direction will generate a significant portion of revenue after halving in 2028.
CEO and chairman of Stronghold Digital Mining Greg Beard said that miners whose only advantage is more efficient devices will be at a disadvantage.
"Companies with access to cheap electricity are in a better position. Operating costs will be lower, which will allow them to manage their capital more flexibly," he stressed.
Bitdeer Strategy Director Haris Basit said that their main strategy was to invest in data centers and strengthen vertical integration through their own developments and innovations. This has led to new sources of revenue like the AI Cloud cloud service and the recently announced 4nm miners.
"Bitcoin halving happens like clockwork every four years. This is a well—known variable, which is a guideline for us, allowing us to focus on improving operational efficiency," he commented.
Recall that Fineqia International analyst Matteo Greco expressed the opinion that halving the block reward would lead to a demand shock and strengthen the mining sector.
https://forklog.com/exclusive/kakoj-budet-tsena-bitkoina-posle-halvinga