by Bloomberg, Bitcoin miners are set to face more than $10 billion worth of losses due to the upcoming halving event, which is going to take place in less than five days from now.The immediate reward for mining new blocks will be slashed from 6.25 BTC to just 3.125 BTC per block.
The halving is expected to deliver a particularly strong blow to those mining companies that have higher-than-average operation costs. Historically, miners were able to recover from the impact of block reward reduction due to bull runs that followed each halving. As by Chainalysis, miners were busy building cash liquidity on the verge of the first two halvings in 2012 and 2016, but this was not the case ahead of the third halving in 2020. Based on the performance of Bitcoin following the two previous mining cycles, miners waited longer to liquidate their reserves since they were anticipating higher prices.
Core Scientific CEO Adam Sullivan has noted that power has become"extraordinarily constrained" in the US. Tech giants of the likes of Amazon are willing to spend massive amounts of money on data centers. This will make it harder for miners to secure new low-cost power contracts.Alex Dovbnya is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets.
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