Fidelity Digital Assets stated in a report that while Bitcoin holders typically view the quadrennial reward halving as a positive event that could increase prices, miners must carefully plan for it. This event cuts their bitcoin earnings by 50% that causes a risk of bankruptcy if not managed properly.
Analyst Daniel Gray wrote that:
“Miners have to keep up their hash rate, energy usage, and real estate, while also competing with everyone else on the network who is trying to do the same thing.”
According to the report, Hashrate refers to the total computing power used to mine and process transactions on a blockchain like Bitcoin. It said that miners must be proactive and can’t simply maintain their position on the network.
Gray wrote that miners must always strive to increase their hashrate, improve its efficiency, obtain cheaper energy, and expand their infrastructure to accommodate new machines. He also noted that every other miner is also competing for the same resources.
Fidelity pointed out that the months following the halving are particularly challenging. During this time, Bitcoin is trying to catch up with the immediate decrease in rewards, and miners need to have enough capital reserves to make up for the drop in revenue.
The report added that while previous halvings led to weaker miners leaving the industry, the overall industry rebounded with more miners and higher hash rates than before.So,it can be said that both the Bitcoin network and the industry are strong and can bounce back from challenges.
