Analysts at Galaxy Digital predict that the upcoming Bitcoin halving in April could cause the network hash rate to drop by 20%.
Analysts predict that the halving will affect eight specific models of mining machines, reducing the network's hashrate.
The halving will reduce the mining reward per block from 6.25 Bitcoins to 3.125 Bitcoins, prompting miners to seek greater efficiency and lower costs to mitigate the impact of lower rewards. The current hash rate is approximately 515 exahash per second (EH/s).
The affected models were identified in a report released Wednesday.
This prediction is based on an analysis that takes into account the new block subsidy, transaction fees that make up 15% of the reward, and a Bitcoin (BTC) price of $45,000 (currently around $52,000).
The analysis also considered future electricity prices and costs from public miners. The variation in hash rate is due to the fact that the break-even point of these ASIC models is sensitive to changes in the proportion of Bitcoin price and transaction fees.
The report suggests that miners using older, less efficient machines may use custom firmware to improve ASIC efficiency or sell their equipment to miners with lower power costs. Masu.
Compass Point Research & Trading, through Senior Analyst Chase White, has priced in an average Bitcoin price of $55,000 before the halving, with the hash rate falling from the expected 565EH/s in April to May. We expect it to shrink slightly to an average of 500EH/sec. After that, it is expected to rise to $57,500.
Expectations for the halving in the second half of 2023 and market recovery have prompted significant investment in mining infrastructure, with companies such as Riot Platforms and Bitfarms expanding their mining capacity through significant purchases of mining equipment.
“We think miners with low or no debt, bottom-quartile power costs and efficient mining fleets will be fine,” White said. “However, we do expect it to be painful for everyone, especially in the early stages, as marginal miners try to wait out each other until they shut down.”
