How the Reward Halving Affects Miners Today
In May, Bitcoin mining profitability saw a significant drop triggered by the fourth halving event. This halving slashed the mining reward per block from 6.25 BTC to 3.125 BTC, further intensifying Bitcoin's scarcity—its total supply is capped at 21 million coins.
Sudden Drop in Mining Revenue
Initially, enthusiasm around the halving and the debut of Bitcoin Runes kept mining revenue relatively high.
However, this momentum was short-lived. Total income from block rewards and transaction fees plummeted to a new low of $26.3 million on May 1. Before the halving, Bitcoin miners averaged around $6 million daily, according to Blockchain.com data. This sharp decline has raised concerns about the future of Bitcoin mining.
Ironically, on the same day as the halving (April 20), mining rewards hit a historic daily peak of over $107 million—highlighting the volatility of crypto earnings and the need for miners to adapt quickly.
How Can Bitcoin Miners Stay Profitable?
Anticipating revenue drops, mining operations worldwide have been recalibrating. Without strategic adjustments, miners would rely solely on Bitcoin's market price to sustain operations.
👉 How Bitcoin miners adapt to post-halving economics
According to CryptoQuant CEO Ki Young Ju, Bitcoin's price must remain above $80,000 to stay economically viable under the new reward structure. However, his analysis is based on U.S. mining data, which may not reflect global realities.
Other estimates, like those from financial platform M Square, suggest an even higher breakeven cost—$93,045 per Bitcoin as of May 4. This data, sourced from Cambridge University research, relies on metrics provided by specific mining pools and may not represent broader industry conditions.
For now, though, many rejoice since the current market price lags behind production costs.
Investing in the Future of Mining
Facing these challenges, companies like Bitfarms are aggressively upgrading equipment. Bitfarms allocated $240 million to triple its hash rate.
Bitfarms CFO Jeffrey Lucas explained this strategy in a Cointelegraph interview:
"The upgrades are transformative—increasing our hash rate to 21 EH/s, operational capacity by 83% to 440 MW, and efficiency by 40% to 21 w/TH."
Despite these efforts, Bitfarms recorded its lowest monthly Bitcoin earnings in April over the past two years—underscoring the halving’s severe impact.
👉 The cyclical struggle of miners post-halving
Cointelegraph notes that after each halving, Bitcoin’s price often stays below miners’ profitability thresholds for a period. This phase is marked by uncertainty, increased sales of mining hardware, and the closure of smaller-scale miners.
FAQ
Q: Why does Bitcoin halving reduce miner profits?
A: The block reward is cut by 50%, directly lowering revenue unless Bitcoin’s price rises enough to compensate.
Q: What’s the breakeven Bitcoin price for miners after halving?
A: Estimates range from $80,000 to $93,000, depending on electricity costs and mining efficiency.
Q: How do miners adapt post-halving?
A: By upgrading hardware, relocating to cheaper energy regions, or hedging via financial instruments.
Q: Does halving affect Bitcoin’s price long-term?
A: Historically, reduced new supply has led to bull markets, but short-term volatility is common.
Q: Will small-scale miners survive the halving?
A: Many may shut down if they can’t compete with industrial-scale operations with lower costs.
Risk Warning
Cryptocurrency investments carry high risk. Prices can fluctuate wildly, and you may lose all invested capital. Always assess risks carefully.