Bitcoin‘s current hash rate could see 20% go offline after the halving event, which will only allow the most efficient mining machines to survive. Galaxy’s mining analysts, referencing Coin Metrics data in a report dated February 14, stated that over 70% of Bitcoin’s hash rate was produced by eight ASIC miner models by the end of 2023.
Predictions for Mining Device Performance
Analysts predict that 15 to 20% of the network hash rate from various ASIC models could go offline, considering their sensitivity to Bitcoin price and transaction fees as a percentage of rewards.
Galaxy analyzed potential future power prices and calculated the breakeven point for mining equipment models based on a post-halving economy; the rewards for each mined Bitcoin block will be adjusted from 6.25 Bitcoins to 3.125 Bitcoins.
At the more moderate end of Galaxy’s predictions, nearly all old mining hardware, such as Bitmain’s S9, Canaan’s A1066, and MicroBT’s M32 models, will be shut down, while about half of the MicroBT M20S and Bitmain S17 models will manage to stay online. These five models were responsible for approximately 15% of Bitcoin’s hash rate at the end of 2023.
What to Expect After the Halving?
In 2023, newer and more popular models like Antminer S19 and S19J Pro, along with Canaan’s A1246, which make up more than half of Bitcoin’s hash rate, are expected to continue operating largely, but a small percentage may still go offline in regions with higher operational costs.
However, in a more dire scenario, nearly all old models could be completely offline, yet Galaxy still foresees Canaan’s A1246 and both S19 models potentially surviving. Galaxy’s analysts noted that their predictions could be influenced by specific business decisions:
“Miners using older and less efficient machines will likely have special firmware to increase their equipment’s efficiency and output, while some miner models might change hands to miners with cheaper power costs instead of going offline.”
Analysts also speculate that miners using the new S19 models may not be able to continue their profitability and those using older mining equipment may purchase them as an upgrade. According to Blockchair data, the Bitcoin halving event is expected to take effect around April 20 with the mining of block number 840,000.
