How much Bitcoin does it need to cost for miners to become profitable?

In previous "halving" events, many small mining companies had to file for bankruptcy because they couldn't afford to cover their costs. For example, if it cost companies $35,000 to mine 1 Bitcoin, after the halving, the cost would skyrocket to $70,000.

The average cost of mining Bitcoin as of April 6th was $49,902, when Bitcoin was around $70,000. Therefore, the price of Bitcoin must surpass $80,000 after the halving for mining companies to continue making a profit.

Bitcoin price after the halving events in 2012, 2016, and 2020.

CoinTelegraph screenshot

Kristian Csepcsar, director of communications for Bitcoin mining company Braiins, emphasized that miners are the true Bitcoin players. Although halving puts immense pressure on the entire mining industry, everyone understands why this event is an integral part of Bitcoin, he added.

To mitigate the negative impact of the halving, many mining companies are increasing their cash reserves, operating their mining rigs at maximum capacity, and taking advantage of the price surge to sell more Bitcoin.

Joe Downie, marketing director of cryptocurrency mining services NiceHash, said that the profitability of mining companies depends on the quality and performance of the Bitcoin mining machines, not the scale of the farm. Ethan Vera, CEO of cryptocurrency mining services Luxor Technology, estimates that approximately 600,000 S19 series Bitcoin mining machines in the US have been sold to other places such as Africa and South America. While these devices can still be profitable, they are not suitable for the high costs in the US.

According to Bloomberg, S19 machines, which cost $7,030 in March 2022, will drop to $356 after the halving. Instead of selling their mining equipment at a lower price, some American miners are choosing to move their equipment to areas with lower electricity costs and third-party data centers.

Meanwhile, Laurent Benayoun, CEO of hedge fund Acheron Trading, argues that Bitcoin mining profitability will not necessarily decrease after the halving. The reduction in mining rewards will be offset by an increase in transaction fees (Bitcoin network fees). He also predicts that fewer mining companies will cease operations this time compared to previous cycles.

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