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.
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…
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