BTC Miners are Staring at Losses Worth $5 Billion

The fourth Bitcoin halving event is scheduled for April 20, during which the mining rewards will be cut from 6.25 to 3.125 BTC. Additionally, the miners could potentially liquidate $5 Billion worth of BTC after the halving.

On April 13, research was carried out by the head of research at 10x Research, Markus Thielen, on Bitcoin halving and its implications on miners’ profits. The event could result in a multi-dollar drop in revenue.

“The overhang from this selling could last four to six months, explaining why Bitcoin might go sideways for the next few months — as it has done following past halvings,” said Thielen.

The price of Bitcoin remained between $9,000 and $11,500 in the five months after the 2020 halving, and the market will not indicate any significant spike until October if history repeats itself.

Furthermore, the daily rewards for the miners will decline from 900 to 450 BTC, and the reduction in the rewards could result in a loss of approximately $5 Billion annually for the whole mining industry.

Thielen also emphasized the altcoins and predicted that the halving event would also affect the altcoin’s performance. Many of the altcoins have fallen back heavily in the past few weeks, whereas many remain a long way from reaching their peak in 2021.

Such situations raise concerns and risks for the crypto industry, encouraging companies like CleanSpark Inc. and Marathon Digital Holdings Inc. to invest in new mining equipment as well as acquire small competitors. These efforts will help the companies compensate for the expected decline in revenue.

Marathon, the world’s largest Bitcoin miner, generates 28-30 BTC per day and shifts to generation of 14-15 BTC per day following the Bitcoin halving event. Last week, Marathon’s CEO Peter Thiel stated that the company’s break-even rate is anticipated to be over $46,000 per BTC to remain profitable after the halving event.