Bitcoin miners’ resilience is being put to the test as the halving of the network will negatively impact their bottom line.

Inefficient miners are pulling out of mining operations after the reward for new blocks was halved from 6.25 BTC to 3.125 BTC on April 19, which caused the mining hash price to fall to a four-year low, reaching $0.04 per terahash per second (TH/s) per day on July 4.

Miners are also bracing for a 5% drop in Bitcoin’s mining difficulty (the difficulty it takes a miner to create a new block), the second-largest drop since the FTX collapse in 2022. Back then, 7% of Bitcoin’s mining pool was wiped off as the SBF-induced cataclysm rocked every corner of the industry.

“The 6% difficulty drop is an economically rational response from global miners to the hash price we are seeing,” said Taras Kulyk, founder and CEO of SunnySide Digital, a data center provider for the bitcoin mining industry.

“This is not a pain for most miners, but a respite from the rapid hashrate increases we are witnessing,” The Defiant said.

Kulyk’s voice resembled that of Anthony Power, co-founder of Power Mining Analysis.

“The drop in difficulty and hash power will actually be good news for North American Bitcoin miners who have the most efficient mining fleets and affordable energy,” Power said, adding that “they will be able to efficiently achieve higher BTC production.”

Halving Strain Network

Bitcoin mining is an energy-intensive process in which specialized computers known as ASICs compete to find a random number within an astronomical range of numbers. On average, every ten minutes, a miner finds a number and receives a BTC reward—which in turn secures the network.

According to the protocol rules, every four years or 210,000 blocks, the network halves the block rewards. This reduction is intended to reduce the rate at which new bitcoins are generated, thereby limiting the supply of new BTC entering the ecosystem.

This event is usually accompanied by a mass escape of miners.

Big miners focus on operational efficiency

Kulyk’s team noticed that over the past two months, larger-scale cryptocurrency mining companies have been focused on increasing operational efficiency rather than increasing equipment purchases.

“As the price of bitcoin begins to rise again, we will likely see those who have been waiting on the sidelines continue to buy up next-generation hardware to continue the refresh cycle of older-generation hardware,” he said.