20% of Bitcoin hash rate could go offline after halving — Galaxy Digital


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As much as 20% of Bitcoin’s current hash rate could go offline after the Bitcoin halving, which will see block rewards slashed in half and leave only the most efficient mining rigs standing.

At the end of 2023, over 70% of the Bitcoin hash rate was churned out by eight ASIC miner models, Galaxy’s mining analysts said in a Feb. 14 report citing Coin Metrics data.

“Given how sensitive the breakevens are for the various ASIC models to Bitcoin price and transaction fees as a percent of rewards, we estimate that between 15 – 20% of network hash rate coming from the ASIC models […] could come offline,” the analysts wrote.

Galaxy’s prediction analyzed possible future power prices. It calculated the breakeven point for the mining rig models based on “post-halving economics,” with each mined Bitcoin (BTC) block set to cut rewards from 6.25 BTC to 3.125 BTC, “transaction fees making up 15% of rewards and a Bitcoin price of $45,000.”

On the more conservative end of Galaxy’s estimates, nearly all of the older mining rigs — namely Bitmain’s S9, Canaan’s A1066 and MicroBT’s M32 models — would be shut down, while around half of  MicroBT M20S and Bitmain S17 models will manage to stay online.

The five models together were responsible for around 15% of Bitcoin’s hash rate at the end of 2023.

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Low and high-end range estimates by miner model of hash rate to go offline post halving. Source: Galaxy Digital

Largely surviving would be the Antminer S19 and S19J Pro, which are newer and more popular models that made up over half of Bitcoin’s hash rate in 2023, as well as Canaan’s A1246, though a small percentage of each could still go offline in areas when operational costs are higher.

However, a more dire scenario would see almost all older models going close to completely offline, though Galaxy again predicts that Canaan’s A1246 and both S19 models may be able to hang on.

Related: Bitcoin ETFs account for about 75% of new investments — CryptoQuant

Galaxy’s analysts noted that their estimates could be impacted by certain business decisions.

Miners operating “older and more inefficient machines” will likely have custom firmware to improve their rig’s efficiency and output, while some miner models may “change hands to miners with cheaper power costs” instead of going offline.

The analysts also speculated that miners using the newer S19 models might be unable to continue running them profitability, and those using older mining rigs could buy them up as an upgrade.

The Bitcoin halving will take effect at block number 840,000, which is expected to be mined on or around April 20, according to data from Blockchair.

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