According to a new report from CoinShares, a recent surge in the number of active miners coupled with the upcoming reduction in BTC block rewards will threaten the profitability of many validators after the Bitcoin halving occurs in April. CoinShares estimates an average production cost of $37,856 per BTC after the forthcoming Bitcoin halving — which will reduce the rate of new Bitcoin issuance from 6.25 BTC to 3.125 BTC per block.
CoinShares said Bitcoin’s hash rate increased by 104% last year, indicating a dramatic increase in competition for block rewards. However, the report forecasts a decline in network hash rate as inefficient miners struggle to remain profitable due to reduced block rewards and increased mining difficulty after the halving.
The report said hash rate fell by an average of 9% over the six months following past halvings as inefficient miners were forced to cease operating.
Mining
Bitcoin
