In order to take advantage of lower electricity costs, some US miners may be pushed to relocate abroad by the impending halving of Bitcoin, which would cut miner incentives in half.
It has been reported by several cryptocurrencycurrency news outlets that the next Bitcoin halving is scheduled on April 24. The price of Bitcoin increased by about 430% after the most recent halving, which took place in May of 2020 at a price of $8,750.
If Bitcoin prices do not climb significantly after the halving, many expensive US miners would become unprofitable, analyst Jaran Mellerud warns of a potential “blood bath” in the mining industry. Those mining businesses that are inefficient—that is, those that pay excessive hosting costs—will be the most impacted in this scenario.
In Mellerud’s opinion, the main country of transfer for these miners could be Ethiopia, which could end up being their principal destination.Going forward, he thinks that a greater percentage of Bitcoin’s hash rate may come from Africa and Latin America, particularly from Paraguay and Argentina.
For the most part, U.S. public miners can continue to make money by operating at a minimum electricity tariff, according to Mitchell Askew, Head Analyst at Blockware Solutions, a Bitcoin mining company.
She also added that,
While some of them mine only to stack non-Know Your Customer Bitcoin and are less concerned with profitability, many of them are bound by fixed hosting contracts that require them to mine continuously regardless of profitability.
The likelihood of a mining exodus attests to the influence of energy prices on Bitcoin mining, despite the disparity in perspective. In particular, since prices may rise more, the upcoming halving will undoubtedly push people to find more affordable alternative energy sources. As a result, the hash rate distribution of Bitcoin is likely to change in terms of form.
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