Impact of Bitcoin Halving on Miners and Hash Rates

Bitcoin Halving and Its Implications

Bitcoin recently underwent its fourth halving, reducing miner rewards from 6.25 to 3.125 bitcoins. This event is crucial as it influences the network's hash rate and capital expenditures, potentially benefiting crypto miners. The hash rate reflects the computational power used for Bitcoin transactions, and a higher rate offers miners greater revenue opportunities.

Positive Initial Effects

Initial post-halving effects have been favorable, with hash prices reaching approximately $0.08. This rate benefits miners whose all-in hash costs are around $0.04, enabling them to achieve nearly 50% EBITDA margins. Despite fluctuations in block-level data, optimism persists due to increased Bitcoin transaction fees. New features like Ordinals/inscriptions and the Runes protocol contribute to this positive outlook, signaling bullish trends for mining stocks.

Adjustments in Hash Rate

The hash rate recently adjusted to below 600 EH/s, influenced by the removal of older mining rigs that are less cost-effective with higher power costs. However, a recovery is anticipated as more efficient machines, like the S/T 21s and M60s series, are introduced. Over time, hash prices are expected to stabilize above the $0.045-0.05 range, positively impacting the mining sector.

Promising Mining Companies

Certain mining companies are poised for growth due to low valuations and the potential to double their hash rate with improved efficiency. Notable names include Riot Platforms, Iris Energy, and Bitfarms. Additionally, companies like Core Scientific and TeraWulf are well-positioned due to substantial infrastructure investments and strong free cash flow. These firms are expected to navigate the post-halving landscape effectively.