In an intriguing turn of events, miners of bitcoinBTC are upgrading their mining prowess. With a chunky aggregate of 16% of entire BTC being mined by dominant 16 publicly listed mining companies, they are a force to reckon with in the market, according to broker Bernstein. Their ‘hashing’ power, the very metric that measures the performance of BTC miners, currently sits at about 72 exahashes per second (EH/s), with future plans to escalate this by 182% over the following years.
Yet, the mining realm remains far from a level playing field. The ones reaping the true rewards of this capacity expansion are larger miners with minimal production costs and indebtedness, as they can weather through tempestuous BTC price fluctuations and a cost surge resulting from the forecasted BTC halving that’s due in the first quarter of 2024.
In the existing BTC price milieu, around $30,000, 15 companies operate below the $15,000 production cost per BTC, as per the report. However, the up-and-coming halving is anticipated to surge cost, jeopardizing the profitability of some miners, provided the prices hold firmly.
Still, hope is not entirely forsaken. A spiral of positive momentum stirred by prospective approvals for Bitcoin exchange-traded-fund (ETF) and elevating institutional involvement could pave the way for greater “margin room” for miners by the time 2024’s halving strikes. It must be noted, that the lower the production expenditure, the better the miner stands against the potential repercussions of bitcoin halving.
Nonetheless, there arises a cause for apprehension as three mined harboured a concerning debt-to-equity ratio of more than one, which curtails their resilience towards a slump in bitcoin prices. On a brighter note, four notably robust miners- Riot (RIOT), Marathon Digital (MARA), Hut 8 (HUT), and Hive Digital (HIVE)– have skilfully incorporated bitcoin into their balance sheets. This permits them to anticipate and seize higher prices before selling, thereby magnifying the gains on their mined booty. The market will certainly watch these developments attentively.
Source: Coindesk
