The latest halving, which lowered the block reward from 6.25 BTC to 3,125 BTC, forced less effective mining rigs out of service as mining revenues fell to levels equivalent to Bitcoin’s price of around $30,000, BTIG said in a statement on Wednesday. research report.

Trading fees, which rose to around $128 immediately after the halving, have since stabilized back to the $3-4 range. Bitcoin’s price remains relatively stable after the halving, averaging around $63,000, up 45% year-to-date, notes BTIG.

That said, global hash rates dropped by approximately 6% from the April average of EH624 to EH585 in the first two weeks of May. This decline was expected to be between 5% and 10% when less effective mining rigs – those with a capacity above 35 J/TH – were disconnected from power.

A more significant drop in hash rate could occur if Bitcoin prices continue to decline. The report shows that most public miners achieve a cash break-even point in the range of $20,000-$40,000 per Bitcoin.

Earlier this year, several U.S.-listed miners cut back on sales of Bitcoin used to fund operations, opting instead to exploit equity capital for growth.

“Many miners have built up their BTC stocks ahead of the halving,” BTIG noted, adding that Riot Platforms (NASDAQ:), Cleanspark (NASDAQ:), and Cipher Mining (NASDAQ:) only sold a miniature percentage of their production in Q1 2024, essentially less than the average of 80-90% in 2023. In turn Core Scientific Inc (NASDAQ:) and Bitdeer Technologies Group (NASDAQ:) continue to sell most of their Bitcoin to fund operating expenses.

The three largest Bitcoin ETFs, which account for about 85% of the ETF’s assets under management (AUM), saw a 38% augment in shares outstanding from mid-January to mid-March, during which Bitcoin prices peaked at $73,000.

Since then, while Bitcoin prices have fallen by approximately 14%, holdings in these ETFs have only increased by 1%. “While ETF flows appear to have supported the BTC price earlier this year, the halving was likely more important,” the BTIG analyst explained.

The global hash rate is expected to continue its downward trend throughout the summer, potentially reaching a nadir in August due to high energy prices in Texas, which are expected to average $140/MWh during the summer months.

“We expect the global hash to remain under pressure, with the bottom most likely to occur in August,” CFA told BTIG. Energy prices are expected to stabilize at around $55 per MWh by 2025, with another augment expected next summer.

Large-scale mergers and acquisitions in the Bitcoin mining industry may not be imminent, but smaller acquisitions are expected. Cleanspark’s recent acquisition of the 75MW plant at a price of $250,000/MW sets a precedent for which other miners are likely to pursue similar miniature acquisitions.

“The market is divided into companies that have access to capital and are able to grow, while those that are less fortunate are most likely to sell due to reduced revenues after the halving,” the report concludes.