Bitcoin Miners Could Face High Acquisition Prices and Financial Stress Post-Halving: Glassnode Report
Summary:
Bitcoin miners might face an income crunch due to the next Bitcoin block subsidy halving, according to analytics firm Glassnode's weekly report. With the rising hash rate indicating intensified competition, the corresponding high acquisition prices could push miners into financial stress post-halving. However, some analysts remain hopeful, suggesting miners might boost Bitcoin accumulation prior to the event, and investors could start investing based on halving rumors.
The latest issue of Glassnode's weekly report, "The Week On-Chain," has suggested that Bitcoin miners might face an income crunch in the aftermath of the next Bitcoin block subsidy halving - a pivotal event that could mark severe consequences for miners. For Bitcoin miners who are currently dealing with heightened competition, as evidenced by hash rate's record peaks, these are extraordinary times.
The help comes from Ordinals, which are effectively converting unused blockspace into a way of earning for miners. As the demand for blockspace rises, miners can expect an increase in revenues. Nonetheless, the fees' contribution to the income only represents a slight growth from 1% to 4%, a modest figure compared to previous records.
During the last couple of months, there has been a 50% increase in the hash rate due to the emergence of newer and more miners alongside advanced ASIC platforms. This surge is setting the stage for a potential face-off in the future. When miners' rewards per block drop by 50% in April 2024, the production cost of each Bitcoin will effectively double, pushing it past the $30,000 mark.
Glassnode proposed two models to estimate the price, which could push most miners into financial stress. According to one model, the acquisition price for the most efficient miners is close to $15,1k at present. However, post-halving, this figure could jump to $30.2k. Notably, the other model set the average Bitcoin acquisition price for miners at $24,300, approximately 8% under the spot price as of September 28.
Despite these anticipations, some are quite hopeful about miners' capacity to deal with the upcoming halving. Analyst Filbfilb had mentioned in a Cointelegraph interview that miners might increase Bitcoin accumulation before the event.
Adding to the potential Bitcoin supply dynamics, Filbfilb suggests that smart investors could start "buying the rumor" about the halving and its possible impact on Bitcoin production.
This news doesn't offer any investment advice or suggestions. Every investment or trading action is accompanied by some risk, and readers need to carry out their research before making any investment decisions.
Published At
9/28/2023 10:25:00 AM
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