For Mining To Remain Profitable After The Halving Bitcoin Must Stay Above $80,000

Miners need the BTC price to surpass $80,000 after the halving to sustain profitability and keep their mining operations running.

Source: blog.r10.net

Following the Bitcoin halving, expected in mid-April, the expense of mining with Antminer S19 XPs will escalate from $40,000 to $80,000. The Bitcoin halving is a pivotal occurrence happening every 210,000 blocks, approximately every four years, which slashes the block reward miners receive by half. Besides its indirect influence on Bitcoin's price, the halving profoundly alters miner conduct, as the expenses for mining double while earning the same quantity of BTC. Following the May 2020 halving, the threshold for miners to sustain profitable operations increased beyond $30,000, coinciding with Bitcoin's surge to a new peak of $69,000 during that cycle.

As of April 6, the average Bitcoin mining expense stands at $49,902, while the BTC price exceeds $70,000. Post the halving on April 20, average mining costs will surpass $80,000. To ensure miners remain profitable, the BTC price must exceed this level. Historically, BTC prices have experienced significant surges after each halving event. Following the 2012 halving, Bitcoin's price soared by approximately 9,000%, reaching $1,162. After the 2016 halving, Bitcoin's price surged by about 4,200%, hitting $19,800. Similarly, after the 2020 halving, Bitcoin's price surged by almost 683%, reaching $69,000. Consequently, miners have managed to maintain profitability despite concerns of potential insolvency following each halving. 

Additionally, halving events render numerous mining machines obsolete due to their inability to compete with the heightened demand for high hashing power. Following each halving, there ensues a phase during which the BTC price lingers below the threshold required for miners to remain profitable. This period is characterized by uncertainty and a surge in the selling of mining rigs, alongside the closure of numerous small and individual mining operations. Nonetheless, as demand surges due to the diminishing market supply, the price tends to ascend, frequently surpassing the average mining expenses for miners.

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