halving is approaching, signaling an imminent change in its value. SimpleSwap has identified key prospects for miners and made forecasts on how to navigate the Bitcoin () landscape in 2024.
Significant Changes Ahead
In April 2024, a pivotal event awaits all miners of the leading cryptocurrency – the Bitcoin halving. It is a so-called process of halving the rewards for miners. This planned reduction in Bitcoin emission is linked to its limited total supply, encoded in the cryptocurrency's source code. As we know, a total of 21 million BTC can be mined worldwide.
Halving occurs consistently every 4 years or every 210,000 blocks. Take a look at the table below to learn more about numbers:
Is There Life After Halving?
What will happen to Bitcoin after the halving? Let’s see all the possibilities:
- The rate of new coin mining might decrease.
- The Bitcoin price might rise.
- Cryptocurrency market volatility might change.
- Mining profitability will decrease.
- Bitcoin's attractiveness as a long-term and protective asset might increase.
All of this points to the inevitable transformation of the cryptocurrency market, affecting all its participants. Investors and traders should already be preparing and incorporating this crucial event into their trading strategies
Prospects for Bitcoin Miners after the Halving
Experts from CoinShares have conducted assessments and forecasted that after April 2024, the average cost of mining 1 BTC will be $37,856. In their , CoinShares' investment strategist, James Butterfill, noted that the main challenges for miners at the moment include commercial, general, and administrative expenses. It is likely that these aspects will need to be reduced in the near future in order to sustain mining operations. This also applies to energy consumption – it is expected to decrease to an average of 10 W/T by mid-2026 (currently at 34 W/T).
Additionally, experts reminded that in 2023, Bitcoin network hash rate increased by 90%. By the time of the halving, it is forecasted to be around 450 EH/s. A decline to 410 EH/s is possible six months after, with an expected rise to 550 EH/s by the end of the year.
How to Proceed with Bitcoin Going Forward?
Nowadays, it seems like the high costs of Bitcoin mining are covered by the miners themselves. In some cases, resorting to borrowed funds may be necessary. Abusing loans can damage the overall mining cost structure. This is associated with higher interest costs that can expose companies to additional risks during Bitcoin downturns.
As mentioned earlier, after the 2024 halving, the Bitcoin price is expected to reach around $40,000. If it falls below this mark, the profitable mining of many companies is at risk. There is a high probability that they will operate at a loss and may not survive.
According to CoinShares experts, if the price of Bitcoin falls below $40,000 after the 2024 halving, only a few companies, including Bitfarms, Iris, CleanSpark, TeraWulf, and Cormint, will be able to continue mining.
Halving, Mining, and Ecology
In 2023, discussions about the need for a transition to "green" mining became more fierce. This is a more environmentally friendly form of mining based on the use of renewable energy sources (hydro, solar, wind, geothermal).
According to CoinShares research, more than half of the electricity used for halving is currently generated through eco-friendly means. Experts hope that after the 2024 halving, with reduced rewards and increased costs, companies will not abandon eco-friendly practices and return to traditional mining.
It's worth reminding that traditional or less environmentally friendly mining has led to:
- Deforestation
- CO2 emissions into the atmosphere
- Noise pollution
- Pollution of earth, water, and air
The Most Important Event in Bitcoin's History
Halving is a crucial event in the entire history of Bitcoin. It confirms the cryptocurrency's foundational principles of decentralization, transparency, and protection against inflation. It should either strengthen Bitcoin's position in the market or provide an opportunity for an altcoin to vie for the title of the world's leading cryptocurrency.
It looks like the preparation for the 2024 halving is progressing successfully. Leading mining companies are working on improving efficiency levels by acquiring new equipment or upgrading existing ones to reduce energy consumption. Modern devices have already been purchased by companies like CleanSpark, Phoenix Group, and Cipher.
If you want to learn more interesting facts about crypto then don’t forget to check out our blog! You might like our articles “Algo Trading and AutoCopy: Revolution in the Trading LandscapeThe Impact of Crypto on Unbanked Populations
