Bitcoin Halving Fallout: Up to 20% of Hash Rate May Shut Down

Crypto News– Following the upcoming Bitcoin halving, there’s a looming risk of up to 20% of the current hash rate going offline, leaving only the most efficient mining rigs operational.

Bitcoin Halving Fallout: Up to 20% of Hash Rate May Shut Down

A recent report by Galaxy’s mining analysts, citing Coin Metrics data, revealed that by the end of 2023, around 70% of the Bitcoin hash rate was generated by just eight ASIC miner models.

The analysts noted that due to the sensitivity of breakevens for various ASIC models to Bitcoin price and transaction fees, an estimated 15-20% of the network hash rate could potentially come offline post-halving.

Galaxy’s prediction factored in future power prices and calculated breakeven points based on “post-halving economics,” considering a reduction in block rewards from 6.25 BTC to 3.125 BTC, with transaction fees constituting 15% of rewards and a Bitcoin price of $45,000.

Under these conditions, older mining rigs like Bitmain’s S9, Canaan’s A1066, and MicroBT’s M32 models would likely be shut down, while newer models such as the Antminer S19 and S19J Pro are expected to survive, constituting over half of Bitcoin’s hash rate in 2023.

However, operational costs could still impact even these newer models, with a small percentage potentially going offline in high-cost areas. In a worst-case scenario, nearly all older models could cease operations, although there’s a possibility for newer models like Canaan’s A1246 and the S19 series to remain operational to some extent, according to Galaxy’s predictions.