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CoinShares estimates mining one BTC will cost $37,856 on average after the upcoming Bitcoin halving<\/p>\n
Many Bitcoin miners may struggle to remain profitable following the completion of the fourth quadrennial Bitcoin halving in late-April, according to a new report from CoinShares.<\/p>\n
The report said 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\u00a0forthcoming Bitcoin halving<\/a>\u00a0\u2014 which will reduce the rate of new Bitcoin issuance from 6.25 BTC to 3.125 BTC per block.<\/p>\n \u201cThe Bitcoin mining network has grown by 90% in 2023, raising questions about its environmental sustainability and profitability,\u201d CoinShares\u00a0said<\/a>. \u201cPost-halving, higher-cost miners may struggle due to decreased immediate income\u2026 Only a handful of miners are expected to operate profitably if Bitcoin prices remain above $40,000.\u201d<\/p>\n CoinShares said Bitcoin\u2019s 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.<\/p>\n <\/p>\n \u201cRegardless of whether there are 2 or 2 million miners, the amount of new Bitcoin created remains constant until the next scheduled halving event,\u201d CoinShares said. \u201cIf the collective hashpower of the network increases significantly, the mining difficulty will adjust upwards to keep production rates on target, consequently pushing higher-cost miners out of the market.\u201d<\/p>\nBitcoin’s four-year cycle<\/h2>\n