Big Miners Staring Down Post-Halvening Bankruptcy

Argo Blockchain and several other large miners are likely to struggle to make ends meet after the halving.

Which miners will be forced offline in April?

The Halvening is arguably the most-anticipated event in Bitcoin's calendar, but not everyone looks forward to this four-yearly update to Bitcoin's supply.

While it's great for holders, reducing the number of new coins that come into existence and increasing scarcity, some miners may be eyeing April with concern. With revenues being cut in half in BTC terms, unless bitcoin increases dramatically in price, there will be some companies that can no longer meet their electricity and infrastructure costs.

Hashrate And Halvings: What’s In Store?
Bitcoin’s network typically adapts rapidly to the cut in mining revenues.

At-Risk Miners

Previous halvings have coincided with price increases, though there are never any guarantees. This halving will see block rewards cut from 6.25 BTC to 3.125 BTC, or by 450 BTC per day. This is much less than previous halvings (when rewards were slashed by 25 BTC, 12.5 BTC, and 6.25 BTC), and so it's reasonable to expect the impact to be less.

Against that, bitcoin is in a bull market, so higher prices can be expected. The only question is whether they come soon enough to keep struggling miners afloat.

Some miners are closer to the break-even point than others. Cantor Fitzgerald recently published analysis that shows a number of large miners are likely to be in an uncomfortable position come mid-April. Their research points to no fewer than 11 publicly listed miners who may be unable to mine coins below the cost of production following the halving.

Outfits like CleanSpark should be in the clear. Others, like Argo Blockchain, are going to struggle badly unless prices soar. Their only other hope is that enough smaller miners are even more inefficient, forcing them offline and giving Argo a greater share of network hashrate. That, though, is unlikely, if the past is anything to go by.

Big Changes Coming

Halvings always bring some degree of disruption, as less-efficient miners go offline. Hashrate can drop by double-digit percentages, though has always quickly recovered in the past.

This time around, though, the situation is a bit different. Mining has evolved considerably since the early days of Bitcoin, and even in the last four years. There are now many large mining companies, all of which need to work constantly to ensure their power bills are as low as possible, and their hardware is as efficient as possible.

Bitcoin mining is a $10+ billion industry, with publicly-listed companies involved. If (and likely when) some of these go under, there will be implications beyond hashrate.

The good news is that the Halving is a pre-known event, and miners have a chance to position accordingly. Many will come out of it stronger and better-positioned than before. Others, unfortunately, will not.


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