The bulk of returns in Bitcoin mining are typically realized during the bull market. Therefore, the paramount focus within this industry lies in getting safely through the bear market and even expanding operations during this period.

By doing so, miners position themselves to capitalize on the potentially boundless rewards accompanying the bull market’s surge in bitcoin price and transaction fees. This article delves into the significance of commencing the halving period with a low hosting rate and outlines a strategy for achieving this critical objective.

The impending halving is rapidly approaching, poised to reduce the bitcoin block subsidy from 6.25 to 3.125. A substantial portion of the industry finds itself ill-prepared for this critical event, facing the looming risk of halting operations and ceasing mining activities. Such a scenario would be particularly detrimental given the imminent arrival of the bull market a few months after the halving.

Navigating the halving safely necessitates achieving exceptionally low bitcoin production costs, achievable through either securing a minimal hosting rate employing the most efficient mining machinery, or both.

As we will soon show, miners at risk of shutting down operations are those subjected to hosting rates of $0.07 per kWh or higher, particularly those utilizing machines with efficiencies worse than 20 J/TH. A significant segment of the Bitcoin mining industry, notably in the United States, grapples with these cost challenges.

Real-world data highlights the critical importance of securing a low hosting rate in the current climate. Illustrated in the chart below, variations in hosting rates and machine efficiencies significantly impact bitcoin production costs.

For example, the S19J Pro, a prevalent machine in the network, incurs a production cost of $33k when hosted at $0.08/kWh. Should the halving occur imminently, this cost would double to $66k, plunging miners into negative territory considering the current bitcoin price at $48k. Numerous US-based miners rely on the S19J Pro while hosted at $0.08 per kWh, leaving them dependent on a bitcoin price surge to maintain profitability, or risk facing closure.

Even the relatively efficient S19K Pro could potentially face cash flow challenges post-halving when subjected to a hosting fee of $0.08 per kWh. Currently, its bitcoin production cost at this hosting rate stands at $25k, which could double to $50k post-halving. Similarly, even the world’s most efficient machine, the S21, would only see marginal profitability after the halving. With its current bitcoin production cost at $19k, this would double to $38k post-halving.

On the other hand, through hosting with us in Ethiopia at $0.05 per kWh, the S19K Pro achieves a bitcoin production cost of $15k, potentially rising to $30k following the halving. Despite this increase, the resulting production cost would still maintain a substantial gross margin post-halving, ensuring a secure passage through this period and positioning you to reap the benefits in the forthcoming bull market.

Likewise, contemplate the S21: At a hosting rate of $0.05 per kWh, your bitcoin production cost would amount to a mere $12k, possibly rising to $24k post-halving. Considering the current bitcoin price of $48k, significant profits remain attainable even after the halving. This advantageous scenario could enable you to acquire additional machines during this opportune period for expansion, thereby positioning you to reap substantial rewards in the forthcoming bull market.

Essentially, securing a low hosting price shields you from potential downturns, ensuring your resilience during challenging periods and positioning you to capitalize on the opportunities presented by the subsequent bull market. Avoid being among those forced out in May—opt for halving-proof hosting rates with us to guarantee your survival and prosperity beyond the halving.

Our hosting starts at $0.058 and dips below $0.05 per kWh for larger quantities. We can offer these competitive rates thanks to Ethiopia’s substantial hydropower surplus, which ensures a consistent supply of extremely affordable electricity.

Spots are filling up quickly, so secure yours now with Hashlabs by booking a call with our team.