Bitcoin Halving 2024: Miners Face Uncertain Future Amidst Price Surge and Rising Costs

Bitcoin Halving 2024: Miners Face Uncertain Future Amidst Price Surge and Rising Costs

The next Bitcoin Halving in April 2024 is eagerly awaited by many investors, since this event historically led to a massive increase in the BTC Prize. The Halving has the consequence that the reward for Bitcoin miner is halved in the validation of new transaction blocks. This is to prevent inflation of the asset and the value of Bitcoin in the long term.

The concept of the halving has worked well so far. After each halving, BTC not only stabilized its value, but the course has risen massively every time. Investors have recorded price jumps from several hundred to even a thousand percent. A chart of blockchaincenter.net illustrates this trend.

However, not all miners are euphoric about the upcoming halving. For those who validate the Bitcoin blocks, it could become an extreme burden and question their business model. The block rewards are halved again after the halving, which means that they only earn 3.125 Bitcoin per block compared to the current 6.25 bitcoin.

To survive the halving unscathed, there are only two options for the miners. The first is that the Bitcoin price after the Halving is increasing massively again. After the last halving in 2020, the course rose sharply in the following months and reached a new record high of around $ 69,000 in November 2021. If the BTC Prize after the Halving 2024 increases similarly, the miners could continue to work profitably.

Another factor that the miners presented with challenges are the increased electricity costs. Bitcoin mining requires enormous computing capacities and therefore consumes a lot of electricity. In the meantime, around 40 percent of the miners have higher operating costs than the necessary 6 cents per kilowatt hour to be profitable.

The miners can only check the electricity costs for a limited extent and are delivered to the price dictations of others. There are also other expenses such as hardware, rents for locations and personnel costs. Ethan Vera from the crypto mining service company Luxor Technologies estimates the debt of the global mining industry to $ 4.5 to 6 billion.

If the Bitcoin price does not increase as expected or electricity costs continue to increase, many miners could get into financial difficulties and have defaults on payment. It is also difficult to compensate for the falling earnings through more loused blocks because the competition is large and additional computing power is required.

In the worst case, the Halving 2024 could lead to a disaster for Miner if the price does not increase or other factors are adding. But there is also the possibility that BTC will reach a new all -time high. In this case it would be recommended to buy Bitcoin now, for example with PayPal.