Bitcoin halving will be a litmus test for inefficient ops: Mining execs

The Bitcoin halving will likely wreak havoc on small, less efficient Bitcoin miners but should be no issue for wellestablished players, according to industry executives.

In under a month, Bitcoin miners face the reality of reduced block rewards, which is anticipated to significantly impact profitability and income. Bitcoin mining CEOs tell Cointelegraph that the efficiency and scale of mining operations will be critically important as firms clamber for a share of the reduced rewards. 

Marathon Digital, considered one of the largest mining firms in North America, is among the players that have long been planning for the halving. The firm’s chief growth officer Adam Swick tells Cointelegraph the halving will be a test to reveal the most efficient and well-funded entities.

“While the immediate effect is reduced rewards and profitability, these companies are typically more resilient given their greater access to capital and efficient operations,” Swick explains, warning that smaller operations that are marginally profitable might not survive the halving at all.

One of Marathon’s sites outside of the United States — Abu Dhabi. Source: Marathon Digital

The importance of operational efficiency, balance sheet management and capital structure for miners will also come to the front, according to OceanBit co-founder Michael Bennet.

“Miners with debt burden and maturing securities will sell opportunistically as we continue to break all-time highs to reduce their debt service during the post-halving cycle when the competition becomes more fierce and operational efficiency becomes king,” Bennet said.

History also plays a role, as miners have had four years to forecast and plan how to manage operations. Stronghold Digital Mining CEO Greg Beard noted that previous halvings forced mining companies to adapt to lower-margin environments. As profitability margins are reduced, Beard says miners must sell BTC to pay for more efficient miners:

“I expect some Bitcoin miners will feel pressure to convert BTC to cash to continue to show growth.”

Swick made a similar prediction, noting that Bitcoin’s new all-time high may…

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