Bitcoin Mining Production Drops by 40% Following Halving

Bitcoin Mining Production Drops by 40% Following Halving

In May 2024, the amount of Bitcoin (BTC) mined by U.S. miners decreased by up to 40% as a result of the Bitcoin Halving event on April 20, 2024. This halving reduced the reward per block from 6.25 BTC to 3.125 BTC.

According to a press release from Riot Platform on Tuesday, June 4, 2024, the company's Bitcoin production dropped by 43% month over month, from 375 BTC in April to 215 BTC in May. Despite this decline, Riot earned $7.3 million in energy credits by reducing power consumption and participating in a demand response program with local network operators in the U.S.

Riot also successfully increased its hashrate from 12.6 EH/s to 14.7 EH/s. The hashrate is a measure of the computational power used in cryptocurrency mining.

Meanwhile, CleanSpark reported a 42% decrease in Bitcoin production, dropping from 721 BTC in April to 417 BTC in May, while increasing their hashrate to 17.97 EH/s. In May, the company sold 2.43 BTC at an average price of around $59,000 per coin. The daily average of Bitcoin mined by CleanSpark in May was 13.45 BTC, with a peak of 15.0 BTC on some days.
This reduction in Bitcoin production has been observed since April 2024 among several public miners, including Riot, CleanSpark, Hut 8, Bitfarms, Cipher, Core Scientific, and Terawulf, which reported production declines ranging from 6% to 12%.

Energy Costs Surge Post-Bitcoin Halving

A recent report from Best Broker Miner highlights that the Bitcoin Halving has doubled the energy consumption required to produce one coin. This increase has led to a significant rise in energy and operational costs.

Previously, the electricity needed to mine 1 BTC was 407,059.01 kilowatt-hours (kWh), with U.S. miners producing about 340.82 BTC per day using grid electricity. After the halving, miners now need 862,635.55 kWh to mine 1 BTC. Currently, mining operations consume 384,481,670 kWh daily to mine 450 Bitcoins.

Conclusion

The Bitcoin Halving event in April 2024 has significantly impacted the mining industry, leading to a sharp reduction in Bitcoin production across the board. Major U.S. miners like Riot Platform and CleanSpark have reported substantial drops in output, with decreases of 43% and 42% respectively from April to May. This decline stems directly from the halving, which slashed the block rewards from 6.25 BTC to 3.125 BTC, effectively doubling the effort and computational resources needed to mine each Bitcoin. While the halving has created financial challenges, companies like Riot have adapted by earning credits through energy management programs and increasing their hashrate to bolster their mining capabilities.

Despite the production decrease, the halving has catalyzed advancements in mining technology and efficiency. Both Riot and CleanSpark have managed to significantly boost their hashrates, enhancing their processing power to remain competitive in the mining landscape. CleanSpark's strategy of selling mined Bitcoin at higher average prices also demonstrates a tactical approach to mitigating the impact of reduced production. These adjustments highlight the resilience and adaptability of miners facing the economic pressures brought on by halving events.

However, the increased energy requirements post-halving present a considerable challenge. The doubling of electricity needed to mine a single Bitcoin has escalated operational costs, putting additional financial strain on mining operations. This surge in energy consumption underscores the need for miners to seek innovative solutions to manage power usage and reduce costs. As the industry adjusts to these new dynamics, the future of Bitcoin mining will likely hinge on advancements in energy efficiency and the strategic adaptation of mining practices.

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