BitMEX believes that the Bitcoin hash rate will drop 30%. The cryptocurrency exchange itself confirms that due to insufficient data, the report should be regarded as nothing more than speculation.
The BitMEX cryptocurrency exchange released a report in which it tried to determine the impact of the upcoming Bitcoin halving, scheduled for May.
Given the constant price of Bitcoin and excluding transaction fees, the income of the cryptocurrency mining industry should fall by about 50%. However, as it turned out, this does not necessarily apply to the network hash rate.
The decrease in the hash rate of the Bitcoin blockchain network is determined not only by a decline in block rewards for mining but also by the relationship between the complexity adjustment mechanism and the structure of the mining industry.
The exchange suggests that based on the existing structure of the industry and the assumption that the price of Bitcoin will not change, halving the profitability of mining can lead to a decrease in the hash rate of the network by about 30–35%.
Meanwhile, the difficulty of mining Bitcoin has already reached record lows due to the inability of the most capitalized cryptocurrency to return to February values.
By the way, in early February, Bitcoin hashrate reached new records. The hash rate of the blockchain network reached an absolute maximum of 123.011.832 quintillion hashes per second.
Until the end
In general, in the short term, mining farms should continue to work if their revenue exceeds the total marginal cost of production, i.e. revenue is higher than costs, which vary depending on the volume of mining.
However, anyone who uses the Antminer S9 miner or an older generation, at a price in the range of $5000- $ 4000, suffers losses, unless the cost of electricity falls below 4 cents / kWh.
Of course, in essence, mining is becoming unprofitable, but while the company contributes to fixed costs, it is rational to keep the business open.
If Bitcoin can recover above the $10,000 mark before the May Halving, the mining industry will likely continue to grow exponentially and reveal much more information to the public about the nature of the reduction in the block production of bitcoin.
Bitcoin and unfulfilled dreams
It’s worth noting that, due to limited information about the halving (May halving will be only the third halving in the history of bitcoin), the forecast of the exchange is purely speculative.
However, BitMEX believes that at current Bitcoin price indicators, the hash rate of the Bitcoin blockchain network will most likely decrease by 30–35%. At the same time, the exchange expects that the price of bitcoin will not change much.
According to a Coin Metrics study, pressure from miners in the form of massive Bitcoin sales is likely to continue to increase. This will be connected with the upcoming halvings with Bitcoin Cash (BCH) and Bitcoin SV (BSV), which are planned much earlier than that of Bitcoin (BTC).