After block 840,000, the block reward will be halved, from the current 6.25 to just 3,125 bitcoins. While this also affects large mining companies, it is likely that smaller companies will suffer more from this impact.
Taking advantage of both Bitcoin’s appreciation and the rise in transaction fees, some miners are looking to expand before the election halvewhich creates pressure on your competitors.
After all, unlike other commodities such as gold, where it is possible to obtain greater extraction of materials with more machines, Bitcoin has a fixed reward. In other words, a mining company’s expansion means it is taking money from others.
Major mining companies are betting big before halving
As the mining industry became an extremely competitive industry, the hobby mining of Bitcoin’s early years was quickly replaced by large corporations. Many of them have gone public and are traded on US and Canadian exchanges.
Today Marathon digital It is Riot Blockchain are the two largest, with a market value of $3.45 and $3.07 billion respectively. Then they appear Cabin 8with $2.09 billion, and Clean spark with $1.7 billion.
To maintain their positions, these mining companies must continually expand and renew their equipment. Many of them take advantage of the right moment in the market and invest billions in new machines.
For example, Riot announced last Monday (4) the purchase of $290.5 million (R1.4 billion) worth of ASICs from MicroBT, model M66S. With the new machines, the mining company will increase its computing power by 18 exahashes per second (EH/s).
Marathon noted on Tuesday (5) that it has more than US$800 million (R3.9 billion) in free money. With the amount, the mining company plans to seek opportunities related to the halving, that is, it focuses on the acquisition of small competitors.
“Ahead of the upcoming Bitcoin network halving, the company continues to create balance sheet liquidity to take advantage of strategic opportunities, including industry consolidation.”
Like Marathon, CleanSpark said yes “well positioned for the future” and watch “Take advantage of the opportunities that halving offers”. In total, the mining company has a free balance of US$170 million (US$833 million).
One that is already taking advantage of opportunities is Hut 8. Last week the mining company announced its merger with the American Data Mining Group. “The combined company will be called ‘Hut 8 Corp.’ (“New Hut”) and is an entity based in the USA”the mining company said in the statement.
Since the halving will halve the inflow of new bitcoins for all miners, it is therefore possible that these biggies will be interested in buying some small bitcoins to continue fighting in such an unforgiving environment.
Bitcoin Mining Stocks Soar in 2023
The increased use of the network, both for Bitcoin transactions and NFTs, has been a big help for miners. Moving on, BTC’s 165% rise since January has also helped this sector.
As a result, the shares of these mining companies saw bigger gains than Bitcoin itself.
Regarding January, the company’s shares Marathon are emerging 356%. Riot Blockchain works at a high level 341%. The actions of Clean spark rose 359%. The Canadian Bit farms valued 403% In the wallet. Also Canadian, Cabin 8 saw its shares rise 1,033%but it is worth remembering that it has undergone a merger, as mentioned above.
Finally, while it is an attractive sector, it is worth considering that these stocks are more volatile than Bitcoin itself. Going further, the halving could also have an impact on these actions, and it is important to monitor each company’s strategies.
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Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
