Bitcoin Halving Causes More Than 6,000 Miners To Migrate Out Of The US To Save Costs

Key Points:

• US miners idle thousands of machines ahead of the Bitcoin halving event.
• Machines to be refurbished and sold overseas for lower electricity costs.
• Major investments in new machines were made by mining companies in preparation.

According to Bloomberg, approximately 6,000 older Bitcoin mining machines in the United States are set to be idled and relocated to a warehouse in Colorado Springs for refurbishment before being resold to overseas buyers seeking to capitalize on mining in more cost-effective environments.

Read more: What is Bitcoin Halving? Why is this event of interest?

US Miners Prepare for Bitcoin Halving

This move comes in anticipation of the impending Bitcoin halving event in late April, which will significantly reduce the reward for miners, prompting them to upgrade to more efficient technology to maintain profitability.

SunnySide Digital, a wholesaler, operates the facility where the outdated machines will undergo refurbishment. The company expects to receive and revamp several hundred thousand machines around the time of the Bitcoin halving. CEO Taras Kulyk noted that this migration is driven by buyers seeking lower electricity costs, predominantly in regions like Africa and South America.

According to estimates by crypto-mining services provider Luxor Technology, around 600,000 S19 series computers, comprising a majority of current mining machines, are expected to move out of the US, primarily to Africa and South America. The Bitcoin halving, a quadrennial event designed to maintain BTC’s capped supply, will reduce the reward to 3.125 from the current 6.25.

Mining Companies Brace for Halving Impact

As Bitcoin prices hover around $63,500, miners feel the urgency to bring more efficient machines online ahead of the halving to offset rising electricity costs. Some miners opt to relocate their equipment to regions with lower electricity costs, with Ethiopia emerging as a significant player in the digital mining ecosystem.

In preparation for the halving, major Bitcoin mining companies have placed orders exceeding $1 billion for new machines since February 2023. Despite the uncertainties surrounding Bitcoin halving, the industry continues to attract significant investment, with miners raising over $2.7 billion in the past two years, supplemented by an additional $840 million since the beginning of this year.