The latest halving, which slashed the block reward from 6.25 BTC to 3.125 BTC, has forced less efficient mining rigs offline as miner revenues dropped to levels equivalent to a Bitcoin price of around $30,000, BTIG said in a research report on Wednesday. 

Transaction fees, which spiked to about $128 immediately following the halving, have since stabilized back to the $3-$4 range. Bitcoin price remains relatively stable post-halving, averaging roughly $63,000, which represents a 45% increase year-to-date, BTIG notes.

That said, global hash rates have decreased by about 6% from April’s average of 624 EH to 585 EH in the first two weeks of May. This decline was expected to be between 5%-10% as less efficient mining rigs – those with efficiencies over 35 J/TH – unplugged. 

A more significant drop in hash rate could occur if Bitcoin prices decline further. Most public miners have cash breakevens in the $20,000-$40,000 range per Bitcoin, the report says.

Earlier this year, several U.S.-listed miners reduced Bitcoin sales used to fund operations, opting instead to use equity for growth. 

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

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

Since then, while Bitcoin prices have decreased by about 14%, shares outstanding in these ETFs have only risen by 1%. “While ETF fund flows look to have supported the BTC price earlier this year, arguably more important was the halving,” BTIG analyst explained.

The global hash rate is expected to continue its downward trend through the summer, potentially bottoming out in August due to high power prices in Texas, which are projected to average $140/MWh in the summer months. 

“We expect global hash to remain under pressure, most likely bottoming in August,” said CFA at BTIG. Looking ahead to 2025, power prices are expected to stabilize at around $55/MWh, with another spike anticipated 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 75 MW at $250,000/MW sets a precedent, with other miners likely to pursue similar bite-sized acquisitions. 

“The market remains bifurcated with companies that have access to capital in a position to grow while those less fortunate most likely selling owing to reduced revenues post the halving,” the report concludes.