Bitcoin

The Bitcoin mining sector is poised for a significant shift as market projections indicate a 46% decrease in revenues following the upcoming <a href="https://ultramining.com/news/en/heat-waves-and-halving-bitcoin-miners-cash-in-amid-rising-prices/" rel="noopener noreferrer nofollow">halving</a> event. Analyst Jaran Mellerud predicts this downturn will represent a temporary low point, with an eventual recovery fueled by increasing Bitcoin prices and transaction fees, according to <a href="https://twitter.com/JMellerud/status/1757646246058094921" rel="noopener noreferrer nofollow">JMellerud</a>.
<figure class="wp-block-image"><img src="https://lh7-us.googleusercontent.com/mLWL3_JHKdFJ9T0HfzIrYQgu9J-Uz-2PusioEqeXgcvhmLKgv125osGLjAZWFaf7fYmtXqrkM4LkA3pK-CVl6h7swwyk9pYtQE7iRLY8PswXkUm8n42GmfNyeJZARm7-lxM5v9zzao_8a-EyNJr_GMw" alt="">
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A graph from <a href="https://ultramining.com/news/en/luxor-innovates-with-extended-contracts-and-daily-settlements-for-enhanced-bitcoin-mining/" rel="noopener noreferrer nofollow">Luxor</a> <a href="https://ultramining.com/news/en/impending-bitcoin-halving-may-trigger-major-hashrate-decline-say-experts/" rel="noopener noreferrer nofollow">Hashrate</a> Index dated February 12, 2024, visually plots the expected change in mining revenues over the coming months. The Luxor Hashrate Forward Curve illustrates a downward trajectory for both USD-denominated (USD per PH/s/Day) and BTC-denominated (BTC per PH/s/Day) revenues, evidencing a market bracing for lower earnings as the halving approaches.
The spot price is shown at $86.40, with a gradual decline projected for the subsequent months. By July, the curve suggests a sharp drop, stabilizing at $47.75. These figures represent the point of the best bid and ask on Luxor's Non-Deliverable Hashrate Forward market.
This anticipated decline corresponds to the Bitcoin halving event, a protocol-mandated occurrence that cuts the reward for mining new blocks in half, effectively reducing the miner's reward and potentially increasing the scarcity of new Bitcoin. While this event traditionally exerts downward pressure on miners' revenue due to the reward cut, it has historically been followed by an appreciation in <a href="https://ultramining.com/news/en/impending-bitcoin-halving-may-trigger-major-hashrate-decline-say-experts/" rel="noopener noreferrer nofollow">Bitcoin's price</a>, partly due to the reduced pace of new Bitcoin entering circulation.
Mellerud's analysis offers a silver lining, suggesting that the post-halving decrease in revenues will not be a permanent setback. Instead, the adjustment period may set the stage for a rebound, with mining revenues expected to climb and potentially exceed current levels. The analyst's optimistic outlook is based on the cyclical nature of Bitcoin's price and the potential for increased transaction fees as a compensatory revenue stream for miners.

Bitcoin Mining Revenue Forecast to Dip by 46% Post-Halving, Recovery Expected

Ultramining_Eng

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