Bitcoin (BTC<\/a>) Ordinals are boosting miner profits, but \u201cincome stress\u201d is looming, new research warns.<\/p>\n In the latest edition of its weekly newsletter, \u201cThe Week On-Chain,\u201d analytics firm Glassnode predicted<\/a> fresh problems for miners after Bitcoin\u2019s next block subsidy halving<\/a>.<\/p>\n Bitcoin miner competition is exploding, with hash rate \u2014 the estimated combined processing power deployed to the blockchain \u2014 at record highs<\/a>.<\/p>\n For Glassnode, this indicates unprecedented conditions for miners trying to eke out a living at current BTC price levels.<\/p>\n Ordinal inscriptions are helping<\/a>, with these acting as \u201cpacking-filler\u201d which turns empty blockspace into a source of revenue for miners.<\/p>\n \u201cNaturally, as blockspace demand increases, miner revenues will be positively affected,\u201d it wrote.<\/p>\n The proportion of income received from fees has increased between 1% and 4% compared to lows seen during Bitcoin bear markets, but by historical standards remains modest.<\/p>\n \u201cMeanwhile, the amount of hashrate competing for these rewards has increased by 50% since February, as more miners, and newer ASIC rigs are established and come online,\u201d \u201cThe Week On-Chain\u201d notes.<\/p>\n This hash rate spike is laying the foundation for an upcoming showdown. In April 2024, miner rewards per block will drop 50%, doubling the so-called \u201cproduction cost\u201d per BTC. Currently around $15,000, this will pass $30,000 \u2014 above the current spot price.<\/p>\n Glassnode presented two models for estimating the price at which miners, on aggregate, fall into the red, with the above comparing issuance to mining difficulty.<\/p>\n \u201cBy this model, we estimate that the most efficient miners on the network have an acquisition price of around $15.1k,\u201d researchers explained. <\/p>\n \u201cHowever, the purple curve shows the post-halving \u2018doubling\u2019 of this level to $30.2k, which would likely put the majority of the mining market into severe income stress.\u201d<\/p><\/blockquote>\n A previous model put the average miner acquisition price at $24,300 per Bitcoin \u2014 around 8% below spot as of Sept. 28.<\/p>\n Others are more optimistic about how miners will handle the build-up to the halving.<\/p>\n Related:\u00a0Bitcoin exchange volume tracks 5-year lows as Fed inspires BTC hodling<\/a><\/em><\/strong><\/p>\n In an interview with Cointelegraph<\/a> this month, analyst Filbfilb, co-founder of trading suite DecenTrader, reiterated that miners would up BTC accumulation in advance of the event.<\/p>\n \u201cMiners are incentivized to ensure that prices are well above marginal cost prior to the halving,\u201d he wrote<\/a> in an X (formerly Twitter) thread in August. <\/p>\n \u201cWhether they collude consciously, or not they are collectively incentivized to send prices higher before their marginal revenue is effectively halved.\u201d<\/p><\/blockquote>\n Assisting BTC supply dynamics will be what Filbfilb calls smart money \u201cbuying the rumor\u201d over the halving and its own impact on the amount of BTC being minted.<\/p>\n This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.\n<\/p>\n<\/div>\nBitcoin halving impact on miners could be \u201csevere\u201d<\/h2>\n
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BTC price incentives<\/h2>\n
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