Leading Crypto Miners Riot, TeraWulf, CleanSpark Brace for 2024 Bitcoin Halving
Leading cryptocurrency miners are bracing themselves for the challenges ahead as the mining industry prepares for a major transformation with the 2024 Bitcoin (BTC) halving event.
Asset manager CoinShares analysis suggests that Riot (NASDAQ: RIOT), TeraWulf (NASDAQ: WULF), and CleanSpark (NASDAQ: CLSK) are among the best-positioned companies to weather the impending storm.
The Bitcoin halving event, slated for April 2024, entails a reduction in the block reward given to miners by half, leading to a decrease in the rate of new Bitcoin creation.
This deflationary policy is designed to control the network’s supply. While this reduction in rewards is part of Bitcoin’s intrinsic design, it presents miners with a unique set of challenges.
CoinShares’ analysis paints a clear picture of what miners can expect post-halving.
The cost of production and cash costs per Bitcoin, which were approximately $16,800 and $25,000 in the third quarter of 2023, are expected to surge to $27,900 and $37,800, respectively.
Analysts project that the average production cost for crypto miners post-halving is going to be around $37,856.
These anticipated cost increases stem from the reduction in rewards and the need for miners to expand their operations to remain profitable.
“[…] we think Riot, TeraWulf, and CleanSpark are best positioned going into the halving,” the report said.
One of the key challenges miners face is the significant SG&A (selling, general, and administrative expenses) costs.
Failure to reduce these costs might force miners to operate at a loss. This could potentially lead to the liquidation of their holdings and assets.
CoinShares’ analysis assumes a post-halving Bitcoin price of $40,000.
Below this threshold, mining firms could deplete
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