Bitcoin: Inevitable increase in the average cost of mining after Halving?

Halving Bitcoin, scheduled for mid-April, promises to change everything. It is expected to significantly impact the price of BTC, with many analysts associating the halving of block rewards with a possible bull run. However, major upheavals are also expected among bitcoin miners after the halving. The average cost of mining will be revised upwards during this period, endangering the existence of several companies.

Around $38,000 to mine a bitcoin

The cost of bitcoin mining has continued to evolve. For example, in July 2022, it was estimated at $13,000 per BTC, representing a sharp decrease from $24,000 the previous month, according to JP Morgan Chase & Co.

In June 2023, Cambridge University and Macromicro put forward another figure: $29,000. This average far exceeds the cost of producing one BTC at the end of December 2022, which was $15,000, almost double.

Inevitable increase in the cost of bitcoin mining after the halving?

According to CoinShares, the average production cost of post-halving cryptocurrency miners is expected to be $37,856 per bitcoin. »

Based on data recently shared by CoinShare, Cointelegraph clarified that:

  • production costs and cash costs, estimated at $16,800 to $25,000 in Q3 2023, are expected to increase between 27,900 and 37,800 dollars after the bitcoin halving ;
  • the average production cost of post-halving BTC miners is $37,856 ;
  • electricity costs per bitcoin before and after mining represent approximately 68% and 71% of the total cost structure of miners;
  • etc.

The more self-mining rigs a miner has, the larger the data center required, on a per megawatt basis. These considerable capital expenditures are financed either by cash, equity or debt, the latter of which can harm miners’ total cost of production due to higher interest costs and put them at risk in case of drop in the price of bitcoin », Specifies CoinShare.

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To better understand this bitcoin mining cost story, take a look at this report from Arcane Research.

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