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Bitcoin Halving 2024: Big Opportunity or Ticking Time Bomb?

Bitcoin Halving 2024: Big Opportunity or Ticking Time Bomb?

2023 was just around the corner Bitcoin (BTC) miners Actually an excellent year. Several mining companies posted record profits, reflected in soaring stocks. Despite this, the total losses of the 16 publicly traded bitcoin mining companies over the past 12 months amount to a loss of almost $4.5 billion.

The Results This is the result of a survey by the financial website Finbold. The biggest loser is Core Scientific, which reports a total loss of $1.66 billion. Marathon Digital Holdings Inc. and Riot Platforms Inc., both owned by BlackRock, operating in the race is to discover a bitcoin exchange traded fund (ETF) each reported annual losses of more than $600 million.

2022 a problematic year

The losses are mainly related to a difficult year 2022. BTC saw sharp price declines during this period and the industry faced sky-high energy prices. Additionally, the mining sector has also struggled with an unclear regulatory landscape, particularly in the United States, which increases the vulnerability of the sector.

Also increasing mining difficultyWhile this has a positive effect on the decentralization and security of the network, it increases costs. On August 27, BTC selling price was only 56% of the mining cost. This is problematic because mining company bankruptcies can create a domino effect that affects the entire network.

Halving 2024: The challenges for Bitcoin miners are growing

Another issue on the horizon is the halving. This event, which takes place every four years, is expected to take place in April 2024. With revenue then halving, the selling price per bitcoin needs to increase significantly if miners are to stay dry. To keep operations going, miners could be forced to sell a larger portion of their newly mined bitcoin to cover operating costs, further increasing selling pressure on the market.

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