Fidelity Digital Assets have released a report urging Bitcoin miners to be fully prepared for the next Bitcoin halving event.
In the report, Fidelity says that while owners of the Bitcoin crypto usually anticipate that Bitcoin halving boosts prices of the digital coin, this time they must take care not to go bankrupt. This is because the next halving event will slash their earned coins by half.
The challenges facing Bitcoin miners as April the halving nears
According to the analysis, miners need to sustain hash rate. They also need to keep at optimum their energy consumption, and infrastructure. Additionally, as the expected event nears, Bitcoin owners will also have to contend with fierce competition from the entire mining network, all who will be striving to maintain their profits margins.
As a rule, Bitcoin miners tend to be overly confident when mining a virtual currency that is built to appreciate in value as time passes by. However, this report from Fidelity urges them that they must take forward action, and avoid the temptation of maintaining their position as the halving gets closer.
According to the report, the upcoming event will be different from the previous ones. This is because Bitcoin will have to adjust to the immediate reduction in gains. This will require miners to have capital reserves to cushion themselves against the reduced value of their spoils.
The next halving could cause Bitcoin price to drop
Recent trends have seen the price of Bitcoin surge to over $69,000. However, financial markets experts at JP Morgan have warned that the upcoming event could cause the prices to drop to as low as $42,000.
According to the analysts, the production costs after the halving could double to over $50,000. This increase could in turn decrease the network’s hashrate, as fewer miners participate in the production of the coin.
According to the experts, the $42,000 price is where they also predict that the prices of Bitcoin will stabilize after the excitement of the halving event cools down.
However, some other experts are of the opinion that miners could still make sizeable gains if the price of Bitcoin hits the $100,000 mark.
