Bitcoin Needs to Maintain $80k Post-Halving to Ensure Miner Profitability

For Bitcoin miners to remain profitable following the upcoming halving event in mid-April, the price of Bitcoin must sustain at $80,000, as indicated by Ki Young Ju, CEO of CryptoQuant. The anticipated halving, which occurs approximately every four years or every 210,000 blocks, will halve miners’ block rewards, effectively doubling the cost of mining for the same amount of Bitcoin. This process is set to increase the mining expenses for those using Antminer S19 XPs from $40,000 to $80,000.

Historically, halving events have led to significant increases in the price of Bitcoin, alongside influencing miner operations due to the escalated mining costs. For instance, post the May 2020 halving, the break-even point for mining profitability escalated to above $30,000, coinciding with Bitcoin’s price surge to a peak of $69,000 within the same cycle.

As of April 6, the average cost of mining Bitcoin stands at $49,902, with the current Bitcoin price hovering above $70,000. Post-halving, slated for April 20, the average mining cost is projected to exceed $80,000, necessitating a higher trading price of Bitcoin for continued miner profitability.

The aftermath of previous halvings illustrates a substantial price appreciation of Bitcoin: a 9,000% increase to $1,162 after the 2012 halving, a 4,200% rise to $19,800 post-2016’s halving, and a nearly 683% jump to $69,000 following the 2020 halving. Despite initial fears of miners exiting the business due to unprofitability, historical patterns show that miners have managed to stay afloat as the price of Bitcoin eventually surpasses the cost of mining.

Halving events also render some mining equipment outdated due to their inability to meet the heightened demand for hashing power, leading to a period marked by uncertainty, increased sale of mining rigs, and the exit of smaller miners from the market. Nevertheless, as the market adjusts to the reduced supply of Bitcoin, demand typically increases, often driving the price above the average mining costs and restoring profitability for miners.