Approximately 15-20% of Bitcoin’s total computational power will become unprofitable following the halving in April, according to estimates by Galaxy Digital.
The research suggests that with the reward reduction, miners will shut down some installations, keeping only the most efficient equipment operational.
Analysts estimate that over 70% of Bitcoin’s hashrate is generated by eight models of ASIC devices.
“Considering how sensitive breakeven levels are to asset prices and transaction fees, we estimate that 15-20% of the hashrate may go offline,” specialists noted.
Galaxy Digital derived these figures based on a digital gold price of $45,000, a block reward of 3.125 BTC, and a 15% transaction fee. Energy costs were also considered.
More conservative estimates suggest that nearly all older devices — Bitmain’s S9, Canaan’s A1066, and MicroBT’s M32 series — will become uncompetitive.
About half of the MicroBT M20 and Bitmain S17 installations will be on the brink of zero economic efficiency. At the end of 2023, these models accounted for 15% of the network’s hashrate.
Galaxy Digital noted that the halving will not impact Bitmain’s Antminer S19 and S19J Pro, and Canaan’s A1246 as dramatically, as they constituted more than half of the computational power. Miners may only shut down devices with relatively high electricity costs, experts clarified.
In an adverse scenario, these models could still be profitable for owners.
Galaxy analysts warned that these estimates might need revision if efficient “firmware” is installed on older equipment and devices are relocated to regions with lower energy costs.
The halving is expected at block #840,000 (approximately April 23).
Earlier, by early February, Bitcoin miners’ reserves fell to July 2021 levels. According to Bitfinex analysts, miners are motivated to sell to upgrade infrastructure in preparation for the upcoming halving.