Bitcoin Miners Face Potential $10 Billion Loss Due to Upcoming Halving Event

According to U.Today, Bitcoin miners are potentially facing losses exceeding $10 billion due to the imminent halving event, scheduled to occur in less than five days. The immediate reward for mining new blocks will be cut from 6.25 BTC to just 3.125 BTC per block. This halving is predicted to hit mining companies with above-average operational costs particularly hard. Historically, miners have managed to recover from the impact of block reward reductions due to the bull runs that followed each halving. As observed by Chainalysis, miners were actively building cash liquidity on the brink of the first two halvings in 2012 and 2016. However, this was not the case leading up to the third halving in 2020. Based on Bitcoin's performance following the two previous mining cycles, miners delayed liquidating their reserves as they anticipated higher prices. This time, the aggregate balance of mining pools has also decreased by over 20%, but the decline is significantly smaller compared to the first two halvings. The fact that Bitcoin's price managed to reach a new all-time high on the brink of halving allowed miners to feel more comfortable liquidating some holdings to prepare for the severe impact of the halving. In addition to the Bitcoin halving, miners also face increasing competition from artificial intelligence (AI) companies. Core Scientific CEO Adam Sullivan noted that power has become 'extraordinarily constrained' in the US. Tech giants like Amazon are willing to invest substantial amounts of money in data centers, making it more challenging for miners to secure new low-cost power contracts.