BTC Halving Threat: Only 5 out of 14 Bitcoin Miners Could Stay Profitable as Rewards Get Cut to 3.125 BTC

• The upcoming Bitcoin halving in April 2024, reducing block rewards from 6.25 to 3.125 BTC, is expected to impact miner profitability.
• Anthony Scaramucci of SkyBridge Capital forecasts a surge to $170,000 per coin after Bitcoin halving as his conservative price target.

One of the major events that the Bitcoin community is eagerly waiting for is the upcoming Bitcoin halving scheduled in mid-April 2024. The fourth Bitcoin halving will cut down the block rewards by 50%, from the existing 6.25 BTC per block mined to 3.125 BTC per block mined.

As per estimates, this is likely to impact the efficiency and profitability of Bitcoin miners. The existing revenue model for miners relies on transaction fees and block rewards, with the latter being a crucial component of their earnings. A recent analysis conducted by CoinShares and published on BTC-ECHO has revealed that, following the upcoming Bitcoin halving, only five out of the fourteen miners examined are expected to remain profitable.

Despite the challenges posed by the impending halving, the introduction of innovative technologies, such as ordinals on the Bitcoin network, has showcased the potential for continued innovation within the space. Although the use of ordinals led to a surge in miner fees in early 2023, the momentum has since subsided.

Addressing concerns about the environmental impact of Bitcoin mining, efforts to explore more sustainable practices have led to the rise of Bitcoin cloud mining. This approach, while not without its drawbacks, offers potential effectiveness in reducing energy consumption and technological waste associated with traditional mining methods.

Bitcoin cloud mining also appeals to a growing user base, providing easy accessibility to Bitcoin mining without the need for specialized equipment purchases or setups. The industry is currently attracting increasing interest as it evolves to meet the changing dynamics of the Bitcoin mining landscape.

Bitcoin Price Expectations Post Halving

Historically, the past three Bitcoin halving events have proved to be absolutely bullish for the cryptocurrency leading to strong price rallies for Bitcoin. The expectations are pretty much the same this time as well. Some market analysts believe that Bitcoin can rally past $100,000 after halving.

Anthony Scaramucci, the founder of SkyBridge Capital, has shared his optimistic forecast for Bitcoin (BTC), predicting that the next halving event will propel the cryptocurrency’s price to $170,000 per coin.

Scaramucci’s estimation is rooted in Bitcoin’s historical trend of reaching new all-time highs after each halving, a cyclical occurrence that takes place approximately every four years and results in a 50% reduction in the rate of new BTC production. During a recent podcast with Scott Melker, he said:

“Go back and look at Bitcoin halving cycles. The day that Bitcoin halves, multiply it by four [and]18 months later and it’s been uncanny that that’s been the price of Bitcoin.”

Taking a longer-term perspective, Scaramucci confidently asserts that Bitcoin will easily achieve half the market capitalization of gold, which currently stands at $13.6 trillion. This projection implies a Bitcoin price of at least $323,000 per coin. The financial expert considers his current estimate of $170,000 to be conservative, with the calculation based on Bitcoin’s price being $35,000 at the time of the halving, scheduled for April 2024.

Scaramucci made headlines previously by revealing that his fund was the inaugural external investor to purchase shares of BlackRock’s Bitcoin spot ETF, a move that took place before the ETF received approval on January 11.