- Bernstein said that Bitcoin (BTC) miners add significant capacity and the top 16 publicly traded mining companies account for 16% of the total BTC mined.
- The current price of Bitcoin is around $29,173 and according to the report, the production cost per BTC is below $15,000 for 15 companies.
- If the market sees positive momentum with Bitcoin exchange-traded fund (ETF) approvals and increased institutional participation, miners will have enough “margin space” for the 2024 halving, as stated.
Bitcoin mining companies have started preparing for the challenges that may arise during the Bitcoin Halving event in 2024.
Bitcoin Miners Increasing Their Capacity
In a research report published by Bernstein, it was stated that Bitcoin (BTC) miners add significant capacity and the top 16 publicly traded mining companies account for 16% of the total BTC mined.
Bernstein states that the total mining capacity is currently 72 exahashes per second (EH/s) and the firms plan to increase it by 182% in the next 2-3 years. Analysts led by Gautam Chhugani said the following;
“Nevertheless, it is estimated that larger miners with low production costs and low debt will likely be the major beneficiaries of capacity expansion. These miners will have more capacity to withstand any price volatility and cost increase resulting from the Bitcoin halving in the first quarter of 2024.”
The current price of Bitcoin is around $29,173 and according to the report, the production cost per BTC is below $15,000 for 15 companies. Additionally, analysts stated;
“With the upcoming halving, production costs will double, and assuming there is no price increase from here, several miners will have to reach the breakeven point.”
Bitcoin ETF Approvals Can Change Things
However, if the market sees positive momentum with Bitcoin exchange-traded fund (ETF) approvals and increased institutional participation, it was stated that miners will have enough “margin space” for the 2024 halving. The report added, “The lower the production cost, the better the miner’s position against the Bitcoin halving effect.”
The broker notes that three miners have an equity-to-debt ratio greater than 1, which reduces their ability to withstand low Bitcoin prices.
Four companies – Riot (RIOT), Marathon Digital (MARA), Hut 8 (HUT), and Hive Digital (HIVE) – hold Bitcoin on their balance sheets. This allows these companies to expect higher prices and achieve greater realized gains in the cryptocurrency they obtain through mining.
