According to Cointelegraph: Ahead of the probable Bitcoin halving event in April 2024, asset manager CoinShares has identified Riot, TeraWulf, and CleanSpark as the mining companies best positioned to handle the substantial cost increases that typically follow the event.
CoinShares anticipates the production and cash costs to rise due to the impending halving, from around $16,800 and $25,000 per Bitcoin seen in Q3, 2023, to about $27,900 and $37,800, respectively. Thus, the average post-halving cost of production for cryptocurrency miners is projected to stand at $37,856.
Bitcoin's halving event cuts the block rewards obtained by miners in half, slowing the creation rate of new Bitcoin as part of the deflationary supply control policy. Although the event reduces the rewards for miners, the cost of mining could remain constant or even increase as miners extend their operations striving to stay profitable.
CoinShares bases its analysis on the assumption of a $40,000 Bitcoin price post-halving, stating that any value below it could have mining firms using their reserves or operational buffers for survival. Riot, due to its cost structure and long runway, appears to be in the best position to bear the brunt of the halving event.
Miners' direct cost structures don't seem to be improving despite efforts to boost fleet efficiency – comparing energy consumption to mining output. Electricity costs, pre- and post-halving, represent about 68% and 71%, respectively, of total mining costs.
Lastly, CoinShares warned about the risks of large capital investments needed for high-capacity data centers, which could expose miners to vulnerabilities during Bitcoin downturns, citing Core Scientific's situation as an example.
