In a recent report, financial services firm Cantor Fitzgerald has highlighted potential challenges for 11 major publicly-traded Bitcoin miners, stating that they could operate at a loss on a cost-per-coin basis immediately after the upcoming halving event.
According to the research, popular Bitcoin mining companies like Marathon Digital (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT), and Core Scientific (OTC: CORZQ) may find it difficult to mine Bitcoin profitably if the price fails to see a significant increase post-halving.
While it’s acknowledged that Bitcoin miner revenues are closely tied to the cryptocurrency’s market price, Luxor executive Dan Rosen emphasizes that miners often implement strategies to mitigate potential losses resulting from Bitcoin’s price volatility.
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The report specifically points out Argo Blockchain (UK-based) and Hut 8 Mining (TSX: HUT) (Florida-based) as potentially facing profitability challenges after the halving, citing an “all in” cost-per-coin rate of $62,276 and $60,360, respectively, at the current Bitcoin price.
Hut 8, in its latest mining operations update on January 5, revealed a total reserve of 9,195 BTC, valued at $377 million at current market prices.
According to Cantor analysts, the only firms expected to maintain profitability post-halving, assuming an average Bitcoin price of $40,000 and no significant changes in hash rate, are Singapore-based Bitdeer (NASDAQ: BTDR) and US-based CleanSpark (NASDAQ: CLSK).
CleanSpark Executive Chairman S Matthew Schultz shared the results on X (fka Twitter), citing the entire team of the firm being “committed to efficiency.”
“Today’s brand new report from the research team at @cantorfitzgerld shows that this focus is showing in our results. Below, with approval from the firm, is the ALL IN POST HALVING COST TO MINE #BITCOIN,” he posted.
Cantor Fitzgerald’s metric for evaluating miner costs, known as “all in per coin,” includes factors such as electricity costs, hosting fees, and other cash expenses associated with producing a single Bitcoin.
The Bitcoin halving, scheduled for April, involves a reduction in mining rewards for Bitcoin miners. While some analysts view this as a bullish long-term indicator for Bitcoin’s price, miners with high operational costs could face challenges, especially if the price does not rise sufficiently to cover their expenses.
Dan Rosen, associate director of derivatives at Bitcoin miner Luxor, underscores the common industry practice of miners employing various strategies, such as purchasing derivatives like hash rate futures contracts and BTC-related options, to hedge against potential BTC price volatility.
Information for this briefing was found via CoinTelegraph and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
