Miners have played out the classic "buy the rumours, sell the facts" scenario. In the three days since spot Bitcoin ETFs were approved, miners sent 111,000 Bitcoin worth $5 billion to crypto exchanges. The highest volume over the past six years was set on 12 January, when crypto miners transferred 61,400 BTC.

Miners send coins to crypto exchanges to then sell them. This huge outflow is due to fears of the upcoming halving. The event that halves the reward for mining a block may come as soon as April.

The average cost of Bitcoin mining, according to the MacroMicro portal, is $46,500, while the market price of the cryptocurrency is only $42,700.

On average, mining remains unprofitable due to extremely high competition. Large miners are actively increasing mining capacity and looking for ways to reduce costs. When weak companies become unprofitable due to growing losses, their capacity is bought up by more efficient competitors.

Electricity accounts for around 70% of all Bitcoin mining costs. As a result, mining companies either switch to alternative energy sources or move to regions with low electricity costs. TeraWulf's direct connection to a nuclear power plant in the US without dealing with distribution grids can be considered one of the best solutions so far. This allowed the company to lock in a rate of $0.02 per kWh for five years.

CoinShares analysts have calculated the cost of crypto mining for the top public miners. Only five out of the 14 companies examined will have a cost of production below $40,000 per coin after halving.

The vast majority of them continue to build capacity in hopes that the cryptocurrency's price will rise. In their investment estimates for 2024, the price of Bitcoin is in the range of $60,000-100,000. If the forecasts don't pan out, a lot of negative shocks await miners this year, and all newly mined coins will be sent directly to crypto exchanges.

StormGain Analytical Group 
(platform for trading, exchanging and storing cryptocurrency)

Register on StormGain Now