Blockchain analytics firm Tradeblock estimates that the cost to mine bitcoin will rise to over $12,500 following May’s halving event. 

According to the report , May’s halving event, which will reduce the supply of newly minted bitcoin by 50%, will significantly increase the breakeven cost for miners. Tradeblock researchers estimate that commercial mining operators were able to achieve a healthy profit margin throughout most of 2019, with the rising competition in hash rate corresponding to an increase in bitcoin’s price. 

The report reads, 

Network hash rate has continued on a record run, making new highs nearly each week […] As resources dedicated to mining rise over time, efficiency gains and/or mining costs rise. As such, in order to maintain healthy profit margins for miners, a rising hash rate is typically needed to correspond with a rising bitcoin price.

Tradeblock reports the current breakeven cost for bitcoin miners to be around $6800 using Bitmain’s Antminer series. However, the analytics firm claims that cost will increase to over $12,500 following May’s halving from a combination of rising hash rate and reduced mining reward.  

Tradeblock says miners are anticipating bitcoin’s price to increase in order to cover their operating costs, 

Our estimated breakeven costs indicate that miners are continuing to increase resources towards the network despite what is set to become a cost (per mined btc) increase following the halving. This suggests that miners are likely expecting the price of bitcoin to rise to higher levels (above ~$12,000-15,000 per BTC) around the halving allowing them to continue to generate a profit.

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