Major Bitcoin mining companies, such as RIOT Platforms and Marathon Digital, encounter a downturn in production for the year 2024, according to insights from CryptoQuant, a prominent analytics firm.
This decline coincides with the approach of Bitcoin’s fourth halving event, as the industry grapples with heightened competition and diminishing transaction fees.
Recent analysis from CryptoQuant’s research report underscores the challenges faced by leading crypto mining entities like Core Scientific, Bitfarms, and Marathon Digital, all of which have experienced a decrease in Bitcoin production this year.
Factors contributing to this decline include reduced transaction fees within the Bitcoin network, increased network hash rate, and operational disruptions.
However, amidst this industry-wide downturn, CleanSpark emerges as an outlier, demonstrating growth in Bitcoin production, as highlighted by CryptoQuant.
Some miners have escalated their selling activities to alleviate financial strains in anticipation of the halving event.
CryptoQuant notes a surge in miner daily selling to over-the-counter desks, reaching 1,600 BTC by late March, marking the highest volume of selling since August 2023.
Despite these hurdles, competition within the sector remains fierce, with Bitcoin’s network hash rate steadily climbing.
This necessitates additional resources to sustain daily production levels, as emphasized by CryptoQuant’s data indicating a “record-high competition for Bitcoin block rewards,” with hash rate levels soaring since the previous halving in 2020.
While the industry faces formidable challenges, experts observe a shift in the landscape compared to previous years, with current cryptocurrency prices providing a degree of relief to miners.
Hub 8 CEO Asher Genoot notes that the market dynamics differ from those witnessed in 2022, suggesting that the current environment is more supportive of miners, thereby mitigating the risk of widespread bankruptcies.