Galaxy Digital’s Prediction: As the Bitcoin community braces for the upcoming halving event in April, Galaxy Digital’s analysts have issued a stark prediction—a possible 20% decline in the Bitcoin network’s hash rate. This anticipated drop is expected to predominantly affect eight specific mining machine models, potentially disrupting the network’s current hash rate of 515 exahashes per second (EH/s).

Impact of the Halving

The halving event is set to slash the mining reward from 6.25 to 3.125 bitcoins per block, pushing miners to hunt for greater efficiency and cost-saving measures. This comes as miners grapple with the necessity to offset the decreased rewards. The report released on Wednesday sheds light on the affected models, while the market watches Bitcoin’s price hover around $52,000, against the backdrop of the analysts’ calculations based on a $45,000 valuation.

Analysts’ Analysis

The analysts’ projection takes into account the anticipated new block subsidy and transaction fees, which make up 15% of the miners’ rewards. The variance in the hash rate is linked to the sensitivity of the breakeven point for these ASIC models, which is affected by fluctuations in Bitcoin’s price and transaction fee proportions. As the halving approaches, miners with outdated equipment might opt to enhance ASIC efficiency through custom firmware or offload their hardware to those operating in regions with cheaper electricity.

Compass Point Research & Trading Weighs In

Compass Point Research & Trading offers a slightly more optimistic view, with senior analyst Chase White predicting an average post-halving hash rate of 500 EH/s in May, down from a projected 565 EH/s in April. This forecast is based on an average Bitcoin price of $55,000 prior to the halving, with an expected increase to $57,500 afterwards.

Investment in Mining Infrastructure

In anticipation of the halving and a potential market uplift in the latter half of 2023, major investments in mining infrastructure have been observed. Companies like Riot Platforms and Bitfarms are significantly expanding their mining operations, signifying a robust commitment to the future of Bitcoin mining, despite the impending challenges.