According to Galaxy Digital’s research, most older mining rigs are likely to become unprofitable even after the halving of Bitcoin block rewards in April, prompting miners to take them offline. Approximately 20% of the current Bitcoin hash rate could go offline post-halving, which will halve block rewards and leave only the most efficient mining rigs operational. Galaxy Mining analysts, citing Coin Metrics data in their February 14 report, noted that by the end of 2023, over 70% of Bitcoin’s hash rate was produced by eight ASIC miner models. Given the different ASIC models’ sensitivity to Bitcoin’s price and transaction fees as a percentage of rewards, it’s estimated that between 15 to 20% of the network’s hash rate from these ASIC models could go offline.
Galaxy’s prediction analyzed potential future electricity prices, calculating the breakeven point for mining models based on the post-halving economy with each Bitcoin mined, as block rewards are set to decrease from 6.25 Bitcoin to 3.125 Bitcoin. With transaction fees constituting 15% of rewards and a Bitcoin price of $45,000, Galaxy’s conservative estimates suggest nearly all older mining devices, such as Bitmain’s S9, Canaan’s A1066, and MicroBT’s M32 models, will be shut down, while about half of the MicroBT M20S and Bitmain S17 models will manage to stay online. Antminer S19 and S19J Pro, making up more than half of Bitcoin’s hash rate in 2023, are largely expected to remain, though a small percentage might still go offline in operational areas.
However, in a more dire scenario, nearly all older models could approach going offline, though Galaxy predicts that the Canaan A1246 and both S19 models might still manage to operate. Galaxy analysts note that their estimates could be influenced by specific business decisions, with miners operating older and less efficient machines likely having custom hardware to improve efficiency and output, while some miner models might switch hands to miners with cheaper electricity costs instead of going offline.
Analysts also speculated that miners using newer S19 models might not be able to continue profiting and those with older mining devices could purchase them as upgrades. According to Blockchair data, the Bitcoin halving will occur at block number 840,000, expected to be mined around April 20th or thereabouts.
