According to data from CryptoQuant CEO Ki Young Ju, the cost of mining using Antminer S19 XPs is set to double from $40,000 to $80,000 after the upcoming Bitcoin halving in mid-April. The halving event, occurring approximately every four years, reduces the block reward earned by miners by half.
Aside from its indirect impact on the price of Bitcoin, the halving event significantly affects miner behavior. Mining costs double to earn the same amount of BTC, prompting miners to reassess their operations’ profitability.
Historically, Bitcoin prices have experienced substantial increases following halving events. After the 2012 halving, the price surged by around 9,000%, reaching $1,162. Similarly, following the 2016 halving, Bitcoin’s price soared by about 4,200% to $19,800, and after the 2020 halving, it surged by almost 683% to $69,000.
Despite concerns about profitability, miners have remained profitable after each halving event. However, these events also render many mining machines obsolete due to increased hashing power demands. This leads to uncertainty and increased selling of mining rigs, with smaller miners often exiting the business.
After each halving, there’s typically a period where the BTC price falls below the miner’s profitable threshold. During this phase, many miners face challenges, and some may go out of business. However, as market demand increases due to reduced supply, the BTC price usually rises above average mining costs, incentivizing miners to continue operations.
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