Amidst the upcoming Bitcoin halving in mid-April, miners face a pivotal challenge: the BTC price must surpass $80,000 to ensure profitability. CryptoQuant's CEO highlights that mining costs will double, intensifying the stakes for the global mining community.

This adjustment is critical as the halving event slashes block rewards by half, a routine that historically triggers price surges but also elevates operational costs for miners. With the current BTC price hovering above $70,000, the impending halving presents both a risk and an opportunity for miners.

April's Bitcoin Halving to Escalate Mining Costs, Forcing Miners to Navigate New Profitability Thresholds

As highlighted by CryptoQuant CEO Ki Young Ju, the Bitcoin halving, a pivotal event that occurs every 210,000 blocks or roughly every four years, is set to double the cost of mining with Antminer S19 XPs from $40,000 to $80,000. This event, which halves the block reward earned by miners, is a crucial turning point in the cryptocurrency market, per Cointelegraph.

Apart from indirectly influencing the price of Bitcoin, the halving event significantly impacts miner behavior, as mining costs double to earn the same amount of Bitcoin.

Following the May 2020 halving, the price for miners to continue mining profitably soared above $30,000, but the price of BTC also reached a new all-time high of $69,000 during the same period.

As of April 6, the average Bitcoin mining cost is $49,902, and the BTC price is currently higher than $70,000. However, after the halving on April 20, average mining costs are projected to exceed $80,000. For miners to continue operating profitably, the BTC price must trade above this critical level.

Past Halvings Fuel Bitcoin's Price Surges, Balancing Mining Costs Against Market Gains

Looking back at history, the BTC prices have experienced significant surges following each halving. For instance, after the 2012 halving, Bitcoin's price skyrocketed by approximately 9,000% to $1,162. Similarly, after the 2016 halving, it surged by about 4,200% to $19,800, and after the 2020 halving, it saw a substantial increase of nearly 683% to $69,000.

Thus, miners have remained profitable despite concerns about going out of business after each halving. Halving events render several mining machines obsolete, as they cannot keep up with the high hashing power demand.

Following each halving, there is a period in which the BTC price remains lower than the miner's profitable price. According to a source, this period is characterized by uncertainty, an increase in the sale of mining rigs, and the closure of many small and independent miners.

However, as demand rises due to declining market supply, the price increases, often exceeding the average mining costs for miners.

Photo: Microsoft Bing