Bitcoin Halving Approaching: Fidelity Says Miners Need to Prepare

Shri

Fidelity Digital Assets stated in a recent report that while Bitcoin (BTC) holders typically anticipate the quadrennial halving of rewards to boost prices, miners must proactively strategize and plan for the upcoming event to avoid bankruptcy.
It's worth noting that the halving event, expected around April 19, will reduce the bitcoins they earn by 50%.
Challenges Ahead for Bitcoin Miners as Halving Approaches
Analyst Daniel Gray noted that miners must maintain current hash rates, energy consumption, and infrastructure while facing ongoing competition from the entire network, all striving to remain profitable amid the same challenges.
Bitcoin miners often exhibit optimism as they continue to mine a commodity they expect to appreciate over time. The report emphasizes that miners must be proactive, not just maintaining their position in the network if they are to profit.
Gray stressed that miners must continually strive to improve hash efficiency, secure lower-cost energy from more economical sources, and expand infrastructure to accommodate new machines. However, with the competitive landscape, every miner is vying for the same resources.
Fidelity pointed out that with Bitcoin adapting to an immediate reduction in rewards, the post-halving period presents significant challenges, forcing miners to have capital reserves to cushion the income decline.
Nevertheless, the report suggests that with protocol developments, new layers can introduce new use cases and attract more users. Despite historically weaker miners exiting the market post-halving, the industry continues to rebound with increased miner participation and hash rates, demonstrating the resilience of the network and industry.
It's noteworthy that in previous downturns before the halvings in 2012 and 2016, hash rates temporarily declined before rebounding.
Bitcoin Price Could Decline
While Bitcoin's recent surge above $69,000 is notable, analysts at JPMorgan warned that the impending halving event could bring downward pressure on prices, potentially dropping to $42,000.
According to analysts, Bitcoin's production cost has historically served as its price floor. Post-halving, production costs may double to around $53,000, which could lower the Bitcoin network's hash rate as competition among miners producing Bitcoin diminishes. The anticipated $42,000 price level aligns with analysts' expectations, suggesting that once the euphoria of the post-April halving event fades, Bitcoin prices will stabilize.
Alessandro Cecere, Marketing Director at Luxor Mining Pool, noted that even with mining rewards halved, miners can remain profitable if the Bitcoin price reaches $100,000 and stay profitable over time.

Niti998

The Bitcoin halving is also coming soon.

Kahn332

Not everyone can profit from it.

Pooja193

Once profitability is achieved, everything else becomes less important.

Nimmi373

For those who are not miners, there's no need to pay attention.