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What Keeps Bitcoin Miners From Quitting After Halving?

By Evan Jones04/17/2024


The Bitcoin halving is fast approaching, with April 19th as the big day. Bitcoin has already done things it has never done as we approach the fourth halving in its history, as it reached a new all time high before the halving even happened. 

But with this halving taking the block reward from 6.25 BTC to 3.125 BTC, what’s to keep miners, especially smaller scale ones, from quitting like after the last halving? Well, this time feels different, but let’s take a look at the factors that will keep Bitcoin miners from quitting after this latest halving event.

Growing BTC Ecosystem Pushing Fees Higher

The Bitcoin ecosystem has been growing rapidly since the last halving, with the emergence of Ordinals and varying forms of decentralized finance apps on the network. These new forms of Bitcoin transactions all require transaction fees to be executed, which is why Bitcoin transaction fees are almost 50% higher than they were at this time last year.

Assuming the budding DeFi ecosystem on Bitcoin continues to grow, and there continues to be demand for Ordinals and other types of Bitcoin inscriptions, these transaction fees will continue to remain stable if not rise. Since miners receive these fees in addition to block rewards, this should help them remain in business even if they’re getting half the BTC per block. 

If a DeFi ecosystem for Bitcoin becomes as big as something like Ethereum’s, look out.

BTC Price is Paramount

Of course, of equal importance to mining operation sustainability is the actual price of Bitcoin. If Bitcoin’s price were to drop off a cliff after this halving for some reason, then most miners would likely go out of business. This happened to some smaller scale, less efficient operations after the last halving in 2020.

At current block rewards, mining operations are profitable as long as Bitcoin’s price is above $35,000, which means that after the halving, as long as Bitcoin’s price is $70,000 or higher, they’ll still be profitable. 

That said, the current average cost for mining operations is just under $50,000 as of April 6, as competition has been increasing. This means that Bitcoin’s price will actually need to get above $80,000 for most miners to stay profitable after the halving. Bitcoin was trading below $70,000 for most of early April, but has broken through the threshold again as we approach the halving. 

The approval of spot Bitcoin ETFs has certainly helped Bitcoin’s price action leading into this halving, as there had never been such a legitimate way to purchase exposure to the asset before then. Buying pressure from these ETFs is likely to play a key role in Bitcoin’s price after this halving, and could push the price extremely high if the demand is there, as they’ve already been buying almost 7x the newly mined Bitcoin per week.

Efficiency of Mining Operations Matters

Mining operations and how they’re set up will also play a large factor in whether they are able to remain profitable and in business following this halving. The type of energy they use to mine, the type of mining rigs they use, and the overall mining costs generated by the operation will all determine whether a mining operation can stay in business after the halving. 

Operations with older hardware will have to determine whether they can still use them to compete against newer hardware without it eating into revenue. Deciding whether to upgrade is also something that some operations have already considered and done, whether that is through actual equipment upgrades or acquisitions of other firms. 

Bitcoin’s Price History After Previous Halvings

Bitcoin has already done something it has never done in hitting an all time high before a halving event, but it’s still worth looking at what happened to Bitcoin’s price a year after the previous three halvings. 

For the first halving on November 18, 2012, the block reward went down from 50 BTC to 25 per block. Leading up to the first halving, BTC was trading around $12 per BTC (we all should have bought then)/ Bitcoin was trading at over $500 USD per BTC one year later, and even got to as high as $1,000 in December 2013.

Bitcoin’s next halving was on July 9, 2016. This time the block reward was reduced to 12.5 Bitcoin. For this halving, BTC was trading at around $650 USD. By July 11, 2017, BTC was trading at over $2,300 USD, closing the year at over $15,000 USD per Bitcoin.

The last halving was on May 11, 2020, and the block reward went down to 6.25 Bitcoin per block. Leading into the last halving, Bitcoin was trading around $9,000 USD per BTC. One year later, on May 20, 2021, Bitcoin was trading around $50,000 USD per BTC, having hit what was an all-time high over about $63k USD a month earlier. 

As we approach this halving, Bitcoin is trading around $72,000, above its previous all time high that was hit after the last halving, which is a gain of over 600% for those that bought before the third halving event. If Bitcoin gains 600% after this halving, it will put BTC at well over $400,000 per coin a year from now.

Miners Will Stay As Long as They’re in Profit

It should be fairly obvious by now that as long as Bitcoin miners can remain in profit, they won’t be quitting after the halving. Whether they can remain in profit will depend on the price of Bitcoin, the growth of the Bitcoin ecosystem, and each mining operations’ setup. 

It’s also worth noting that if miners were to fall off after the halving, the mining difficulty decreases, increasing profitability, as there is less computational power needed. This is added motivation for most miners to keep mining and essentially prevents there from being a situation where there are no more miners.

But with the way the market for Bitcoin is trending, it seems hard to bet against Bitcoin’s price going up and helping miners stay in business. 

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Evan Jones


Evan entered the crypto scene in 2017, attracted to the many disruptive possibilities that blockchain could have on current world systems. He has a keen interest in decentralized services, payment processing, and viable NFT use cases such as event ticketing. He spends his days writing with his dog Kobe under his feet, if not on his lap.

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