As Bitcoin miners halve the Fourth Global Bitcoin Subsidy, which will halve Bitcoin mining revenue, they are looking for tactics to reduce prices and increase revenue. For some, the last component of this equation means buying new, expensive mining equipment.
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Bitcoin miner production is largely a China-based duopoly, with the two largest Bitcoin mining ASIC brands launching their peak productivity styles to date in September and October this year. At its Global Digital Mining Summit in September, market leader Bitmain introduced the Antminer. S21, the most resilient and effective Bitcoin mining rig ever designed. The design produces two hundred terahashes per moment and consumes 17. 5 joules of force per terahash, a 42% and 19% improvement over the Antminer S19 XP specifications respectively: the existing Bitmain bar then followed this style with the Antminer T21, with a lower hashrate of 190 TH/s and a power of 19 J/TH but at a lower unit price.
(Terahashes per second, or TH/s, is a measure of mining computing power, while joules per terahash is a measure of the amount of electrical energy fed through a mining rig per terahash, where the joule is interchangeable with watts. )
MicroBT unveiled its newest ASICs, Whatsminer M60 and M60S, at its own showcase in Dubai in October; The M60 includes models with hashrates ranging from 162 to 170 TH/s with an output of 19. 2 J/TH, and the M60S is available in 178 TH/s and 186TH/s models with an output of 17. 5 J/TH.
Top Bitcoin Miners Ranked Based on Power and Efficiency
Among the indexed companies, Iris Energy, Cleanspark and Bitfarms have publicly announced the acquisition of state-of-the-art machines. Cleanspark acquired 22,000 Antminer S21 sets of 4. 4 exahashes per moment (EH/s), while Iris acquired 7,000 of the same style 1. 4 EH/s. Bitfarms has acquired 35,888 Antminer T21s capable of generating 6. 8 EH/s, and the company has also been given the option to purchase another 28,000 T21s in 2024.
It’s also worth noting that Iris, Bitfarms, and Cleanspark all purchased those machines at competitive costs compared to Bitmain’s other models, but that’s because these are pre-orders that will be delivered in multiple shipments in the first and second quarters of 2024. This means that in the most productive scenario. In this scenario, the delivery window will be just in time for Bitcoin’s halving.
Purchase price for new miners from Bitfarms, Cleanspark, and Iris
These are just the first announced orders for those next-generation machines, but more will most likely follow. Some miners are possibly waiting to see how reliable those models are before placing an order.
The Bitcoin mining industry has long since gone from being a garage hobby that any Tom, Dick, and Harry can do with their private computers. Bitcoin mining corporations, whether public or private, are now sophisticated, large-scale organizations that operate tens of thousands of specialized computers in warehouses. When new equipment is available for those operations, there is no one-size-fits-all approach. Mining corporations make individual decisions based on their monetary strength and market position, and they can acquire those machines with a combination of cash, financing, and capital raising.
Nor do all miners buy new machines as soon as they roll off the production line. Sometimes they don’t have enough money to ensure that a company acquires or chooses to operate existing machines until they become obsolete. The value of the tag, which can vary, is another critical factor, as the initial acquisition value of an ASIC miner can make a big difference in the return on investment. There are also many other factors, for example the fact that a miner has a particularly advantageous energy contract that allows them to operate less effective machines with higher levels of profitability.
Generally speaking, miners try to improve their operations intelligently when new state-of-the-art hardware hits the market so that they can keep up with the conversion difficulties of Bitcoin mining. This self-correcting metric adjusts every two weeks based on the overall active computing strength on the network. If more computing power is used, the difficulty increases, and if less computing force is used, it decreases, affecting the miner’s profitability. There are no shortcuts to locating a Bitcoin block – it’s a brute force arms race.
For public miners, who have greater access to investment and fundraising equipment than other miners, many of them are the first to get new material. When Bitmain introduced the Antminer S19 XP in November 2021, for example, Marathon Digital temporarily ordered 78,000 of them for $879 million, and other miners like Bitfarms, Cleanspark, and Riot followed suit in 2022.
An exahash is a unit that measures the amount of computing power of Bitcoin mining. Currently, the entire Bitcoin miner network produces around 500 exahashes per second. He set records month after month.
Bitcoin hashrate nears 500 million TH/s
With its S21 order, Cleanspark is expected to increase its hash rate by 44% and its power power by 14%. Iris can increase her own hash rate by 25% and her power power by 18%. With the T21, Bitfarms will more than double its hash rate and increase its potency by up to 29%. These adjustments will have significant effects on your profit generation and operating costs.
The new purchases will increase the hashrates of those miners.
Let’s take a look at what this means in concrete numbers. Currently, Cleanspark’s direct operating charge, which includes the charge for electric power and on-site labor, is $0. 059/kWh, which can translate to $363,432 in daily profits; Iris’ direct operating charge is $0. 048/kWh, which can translate to $229,690 of daily revenue; and Bitfarm’s direct operating fee of $0. 05/kWh could earn the company $207,900 (in the scenario, we assume a hash value of $75/PH/day and 24-hour availability).
Impact of new purchases on each miner’s daily profitability
Assumes one hundred percent uptime based on a hash value of $75/PH/day
If all goes according to plan with their Antminer shipments, those miners will have their new machines connected until July 2024. Using the economic hash price projections designed through the Luxor team, we expect what the benefits and prices of Cleanspark and Iris could be. in July 2024 after halving, assuming they force (turn on) all of their Antminer controls. As shown in the tables below, Cleanspark and Iris can earn just $183,000 and $126,000 in profit per day, respectively, with S21 in their fleet. compared to $73,000 and $67,000 respectively without them – a difference of 41% for Cleanspark and 38% for Iris.
Hypothetical profitability after halving with new machines
Hypothetical Profitability of New Mining Hardware
This comparison only looks at direct operating cost and not total operational overhead or alternative means of revenue generation. But it illustrates that new hardware can make a massive difference in a miner’s profitability levels after the 2024 halving.
So far, Iris, Cleanspark, and Bitfarms are the only public Bitcoin miners announcing S21 orders. Others are no doubt making plans for this, and some have already done so, but they are not making those requests public.
After what the next public miners might be, a smart position to start is to take a look at your current electric power and fleet power prices. Miners with higher energy costs and less effective fleets would obviously get the maximum benefit with the addition of S21 and M60. to the mix, while others with lower costs and more effective fleets probably wouldn’t have the same pressure to upgrade right now, even with the halving of profits. The chart below represents the operating costs and power of the popular public mining fleet in the second quarter. of 2023.
Power and cost efficiency for fleets of publicly-traded bitcoin miners
Bitfarms, Cleanspark, and Iris are in the middle of the pack in terms of electric power prices, and Iris and Cleanspark are also in the middle when it comes to fleet efficiency. So while those numbers alone may not possibly be an obvious choice for a prompt upgrade, their orders for next-generation machinery show that those mining corporations are still proactive in making sure they can stay ahead of the curve when the halving comes. These purchases also imply that, if those corporations feel compelled to modernize, mining corporations with higher capacity energy prices and less efficient fleets probably deserve modernization as well.
We can take this research a step further into electrical energy equilibrium values at other hash value levels for other machines. In the table below, we provide Antminer’s ASIC styles in descending order based on their hashrate (in TH/s) and power (in J/TH). The top row shows other hash value levels, while the rows below show the other power balance value levels for each ASIC style based on the other hash value levels.
Breakeven analysis for various miners at different energy costs
The power grades we provide in this table don’t exactly fit the public miners in the chart above. But we can get a rough idea of where the miner is based on how the hash value moves. For example, we can see that, given its power. With a power of 28 J/TH and direct operating costs of $0. 038/kWh, Riot’s break-even hash value is currently $25/PH/day.
According to this analysis, any miner with a direct operating load greater than $0. 05/kWh, or a power equivalent to or greater than 30 J/TH, or both, would be in danger of breaking even or succeeding if halved. Take a stand tomorrow. Bitdeer, for example, can take advantage of an upgrade to its fleet, as can Hut 8 and Hive.
The decisions made by Iris, Cleanspark, and Bitfarms to upgrade their fleets before halving them are indeed positive developments for businesses, but the upgrade does not guarantee that those Bitcoin miners will triumph over their peers next year. In the short term, the announcements boosted its inventory prices. Bitfarms, which announced its acquisition on Nov. 27, is up 44% week-over-week. Cleanspark, after announcing its acquisition on Oct. 11, was up 7% the following week, while Iris is an exception here, as its inventory fell 12%. % following the announcement of its acquisition on 6 October.
It is arguably not true that in the current rally in Bitcoin mining stocks, Iris, Bitfarms, and Cleanspark are leading the pack, with returns of 55%, 44%, and 27%, respectively, over the past week.
The purchase of new machinery can have a favorable effect on stock prices.
As investors look for opportunities that will lead to Bitcoin halving by 2024, it might be worth keeping an eye out for miners who have yet to place an order for next-generation platforms. The ones discussed above (Hut 8, Hive, and Bitdeer) would gain advantages. the maximum of those orders. Marathon, which has higher energy prices but has one of the most effective fleets in the group, could also push the cause of new machines to boost its margins, not to mention the fact that the company has a proven track record. to buy the newest gadget available when it comes to the market.