Analysis of Bitcoin Miners’ Cost-Per-Coin Ahead of Halving: Cantor Fitzgerald’s Insights
As the halving approaches, Cantor Fitzgerald has released its final pre-halving cost-per-coin analysis, shedding light on which bitcoin miners are best prepared to navigate the economic adjustments post-halving.
Based on the latest Q4 2023 results and industry developments from January to April 2024, Cantor’s analysis provides valuable insights for investors. The surge in Bitcoin’s price from $40,000 to a new all-time high of around $73,000 is attributed to the success of newly approved Bitcoin Spot ETFs. However, as the halving draws near, investor focus and funds have shifted towards ETFs due to their direct exposure to Bitcoin’s price movements, causing miners to underperform the token itself.
Cantor’s detailed ‘all-in’ cost-per-coin metric considers all operational costs associated with mining a single Bitcoin, including electricity costs, hosting fees, and other cash expenses. In Q4 2023, Bitdeer Technologies Group, Cipher Mining, and Hut 8 Corp emerged as the best-performing miners in terms of unit economics, while Argo Blockchain PLC ADR, Riot Blockchain, and Bit Digital Inc faced challenges due to higher costs.
With the halving set to reduce Bitcoin mining rewards by half, miners’ cost-per-coin is expected to double if the network hash rate remains unchanged. CleanSpark, Riot, and Cipher are projected to be the best-positioned miners post-halving, while Argo Blockchain, Stronghold Digital Mining Inc, and Marathon Digital may struggle due to high operational costs.
Cantor emphasizes that investing in Bitcoin miners can act as a strategic move for investors anticipating another bull run, despite the halving’s impact on miner profitability. Understanding each miner’s cost structure is crucial, with Cantor’s all-in cost-per-coin model highlighting the total cost to mine one Bitcoin at $17,696, considering electricity and other operational expenses.
As miners transition from profitability to breakeven or loss post-halving, Cantor advises investors to focus on miners with positive free cash flow to sustain operations without additional capital. This approach is deemed more resilient and profitable in the long run, positioning miners to leverage the next Bitcoin bull run effectively.
