The upcoming Bitcoin halving could significantly impact the share prices of high-cost US-based public miners, with some potentially forced to relocate overseas.
According to a report by Cointelegraph, Jaran Mellerud, founder of Hashlabs Mining, warns that a “mining stock bloodbath” might occur if Bitcoin’s price fails to see a substantial upswing following the halving.
Mellerud predicts a crucial three to four-month window after the halving to assess how much the decreased block rewards impact miners’ profitability. The April 24th halving event will cut Bitcoin miner payouts from 6.25 BTC to 3.125 BTC. While halvings have historically led to Bitcoin price surges, any delay in this pattern could mean many miners operating with high costs, particularly those with hosting rates exceeding $0.07 per kWh, may need to shut down.
The result, according to Mellerud, could be a shift in Bitcoin’s hash rate away from the United States towards countries like those in Africa and Latin America, where electricity costs are lower.
The Cointelegraph report says that concerns resurfaced in January when Cantor Fitzgerald’s analysis highlighted the risks for US publicly listed Bitcoin miners if Bitcoin’s price remained near $40,000 post-halving. However, with Bitcoin currently around $51,000, some of that initial risk appears mitigated.
Blockware Solutions mining analyst Mitchell Askew counters that most US public miners operate with energy costs low enough for continued profitability. He believes that even if some become unprofitable, their impact on the overall hash rate would be minimal, and practical factors might discourage relocation overseas.
Mellerud sees Ethiopia, Nigeria, and Kenya in Africa, along with Argentina and Paraguay in South America, as primed to see increased mining activity if a hash rate migration occurs.
Featured Image via Pixabay
