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The Bitcoin halving, one of the most anticipated crypto events in 2024, is less than a month away, and miners seem to be in full preparation for its aftermath. The April event is expected to slash mining rewards on the Bitcoin network in half, making the validation of transactions less lucrative.
As of now, miners receive 6.25 BTC for each validated block added to the network. However, the halving will split their revenue to 3.125 BTC for each block. Interestingly, many miners in the United States seem to be making adjustments, including upgrading to more efficient mining computers, to ensure they remain profitable.
Why Bitcoin Mining Machines Are Being Moved Out Of The US
According to crypto-mining services and logistics provider Luxor Technology, about 600,000 S19 series mining rigs, which account for a large proportion of machines currently in use in the United States, are being moved out of the country. The mining computers are being transferred (or sold) primarily to countries in Africa and South America, a Bloomberg report revealed.
The S19 series are older models of Bitcoin mining machines, and they might not be cost-efficient to run in countries like the US, where energy costs are relatively high. This explains why the miners in the country are ditching the older computers for more efficient ones.
The report quoted another major player in the Bitcoin mining industry, saying that while the S19 series and similar models might not be cost-effective to operate in the United States, they “can still generate decent profits and get an extended life if hosted” in certain regions in Africa.
Meanwhile, some miners opt to sell their hardware, with buyers of the old machines operating in parts of the world with cheap power. Many of these buyers are from Paraguay, Uruguay, Tanzania, and, most notably, Ethiopia.
According to Luxor, the upcoming halving event has been influencing the behavior of buyers towards the purchase of old mining machines. “Some buyers are waiting until after the event to purchase older computers, assuming their prices will drop even more,” the company revealed.
With the Bitcoin halving approaching, Luxor estimates that around 600,000 S19 bitcoin rigs, the majority of machines currently in use, are moving primarily out of the U.S. to places like Africa and South America, where energy is cheaper. The S19 can cost up to $11,500 per unit to…
— Wu Blockchain (@WuBlockchain) March 24, 2024
Ethiopia: The Next Crypto Mining Hub?
Ethiopia, a country located in the Horn of Africa, is forging a strong reputation for itself in the crypto and Bitcoin mining niche. As inferred earlier, a significant proportion of the old US machines are being transferred to the East African nation.
Ethiopia’s cheap electricity has been pinpointed as the major factor driving this development. The Bloomberg report revealed that electricity is about 3 cents per kWh in Ethiopia, while it ranges between 3 to 6 cents in the US.
Earlier in February, Bloomberg disclosed that Chinese crypto mining companies are increasing their investment in Ethiopia. While China’s strict stance against cryptocurrency is believed to have played a role, Ethiopia’s cheap power seems to have played a bigger part in the firms’ move.
Bitcoin price at $64,000 level on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock chart from TradingView
