According to David Materazzi, CEO of automated trading platform Galileo FX,$Bitcoin (BTC.CC)$The halving puts pressure on miners, which will ultimately promote survival of the fittest among businesses.
Materazzi said:"Bitcoin miners are in trouble and the pressure will only grow. The halving in April 2024 not only increased the pressure, but also disrupted the entire industry."
After the halving event, miners' block rewards were reduced by 50%, reducing Bitcoin's output and potential revenue. With the rise in operating costs, many miners' quarterly profits have been decreasing until June 30, 2024. In the past three months, Bitcoin prices have fallen by 4%, which will only exacerbate financial pressure.
Therefore, Materazzi expects "the weak will be eliminated and only the most capable companies will remain".
although most miners struggle to maintain their operations, a few have stood out. For example,$Riot Platforms (RIOT.US)$announced its first quarterly loss since Q3 2023 due to a decrease in bitcoin production caused by the quadrennial halving. However, Materazzi doesn't seem too worried, stating that Riot "is steadily moving forward, and by 2025, its hash rate will increase to an astounding 41 EH/s while holding a large amount of cash."
$Marathon Digital (MARA.US)$ In Q2, there was also an unexpected loss, reflecting the unfavorable adjustment of digital assets valued by market capitalization and the reduction of bitcoin production after the halving in April. However, the company still expects its hash rate to jump to 50 EH/s in 2024, while the installed hash rate in Q2 was 31.5 EH/s.
In order to maintain stable cash flow, some miners have ventured into the field of artificial intelligence and high-performance computing. $Hive Blockchain (HIVE.US)$ is one of them, with its high-performance computing business accounting for about 8% of its total revenue in Q1. The company achieved profits stronger than expected for the quarter ended June 30, 2024, as the miner coped with the halving by increasing its installed hash rate.
Blake Morgan, managing partner of the cryptocurrency tokenization company Mineral Vault, pointed out that a few miners seem to be adapting to the impact of the halving by "ensuring cheaper energy or improving operational efficiency"--usually lasting for several months.
On the contrary, he added, "small miners who use waste energy are actually more successful than large competitors who cannot reduce electricity costs".
Morgan said that looking ahead, miners may get relief in the coming quarters as "Bitcoin prices often appreciate a few months after halving events."