The profitability of Bitcoin mining is diminishing, and several publicly traded mining companies could encounter significant profitability issues after the upcoming Bitcoin halving event.
As per a recent Cantor Fitzgerald report, 11 prominent mining firms, among them Marathon Digital (MARA), Riot Platforms (RIOT), and Bitfarms (BITF), may face challenges in maintaining profitability following the Bitcoin halving scheduled for April 2024.
Non Profitable Mining Business Post Halving
The report conducted an analysis of the “cost-per-coin” for these companies after the Bitcoin halving, assuming a consistent Bitcoin price of $40,000. Out of the 13 companies studied, only two were projected to maintain their profit margins. Bitdeer (BTDR) stood out as the most cost-efficient, with a cost-per-coin of $17,744, while CleanSpark (CLSK) managed to keep their cost-per-coin just below the $40,000 mark, at $36,896.
In contrast, Argo Mining (ARBK) and Hut 8 Mining (HUT) were found to have the highest costs, with estimates of $62,276 and $60,360, respectively.
Cantor Fitzgerald clarified that their research considered all expenses incurred by a Bitcoin miner to produce a single Bitcoin, encompassing electricity costs, hosting fees, and other cash expenditures.
Responding to Cantor’s report, CleanSpark’s executive chairman, Matthew Shultz, emphasized that the key to their low costs lies in efficiency. Shultz stated, “No matter the department, the entire team at CleanSpark is committed to efficiency, whether it’s uptime, equipment, capital management, operations, community engagement, energy usage, strategy, growth, or other key metrics.”
Arthur Hayes: Bitcoin to Find Support in $30,000~$35,000
While the analysis used a $40,000 price benchmark, the current trading price of Bitcoin stands at $39,932 at the time of writing, marking a 0.28% decrease in the past 24 hours according to CoinMarketCap.
Furthermore, BitMEX founder Arthur Hayes has offered a bearish prediction, suggesting that Bitcoin is likely to continue its decline and may eventually find support in the range of $30,000 to $35,000.
In a recent blog post, Hayes revealed that he has taken a position by purchasing a Bitcoin put option with a strike price of $35,000, set to expire on March 29. He expressed his belief that Bitcoin could reach a local bottom within the range of $30,000 to $35,000.
Hayes also speculated on the potential impact of U.S. Department of Treasury Secretary Janet Yellen on Bitcoin’s market performance.
