April 11, 2024 12:50 p.m. | 2 minute read |
from now on Bitcoin According to a recent JPMorgan report, the (CRYPTO:BTC) halving event expected on April 20th could impact the Bitcoin mining industry.
what happened: A report by analysts Reginald Smith and Charles Pearce highlights the potential impact of a Bitcoin halving event, with block rewards for mining new Bitcoin reduced by 50%. While this reduction could lead to a wave of consolidation and business closures within the industry, it could also benefit remaining operators.
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Industry gross profits, currently estimated at about $2.5 billion per quarter, are projected to decline by 30% to 40%. The network hash rate, a measure of computing power dedicated to mining, can drop by as much as 80 Exahash per second (or 13%) from peak to trough.
Historically, Bitcoin has risen significantly in the months following a halving event, if not immediately. Additionally, current market conditions may differ from previous cycles.
Related Article: Marathons, Riots, and Huts 8 CEOs tell Benzinga how the Bitcoin halving will affect miners
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Why it's important: Halving events are a key part of Bitcoin's economic model and are designed to regulate the rate at which new Bitcoins are created. Since block rewards are halved every four years, Bitcoin prices rose after the halving due to reduced supply, more efficient miners, and increased demand.
Among the targeted companies, clean spark (NASDAQ:CLSK) is considered to be in the best position due to its efficient mining fleet, low all-in mining costs, and favorable hashrate comparisons, and should deliver record revenues and profits after the halving .
vice versa, crypto mining (NASDAQ:CIFR) is in the worst position in the short term, despite having the lowest energy prices, as tough hash rate comparisons and relatively high overhead costs weigh on revenue and profit growth. It is believed that there is.
what's next: The impact of memecoins and Bitcoin as an asset class for institutional investors is a topic expected to be thoroughly explored at Benzinga's upcoming Future of Digital Assets event on November 19th .
Read next: Bitcoin Halving 101: Everything investors need to know
This content is created in part using AI tools, and reviewed and published by Benzinga editors.
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