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With Bitcoin’s next halving set to take place this month, miners are using record profits to adapt their business models for chaotic opportunities.

The halving is almost upon us. As the whole world of Bitcoin waits with bated breath for mining rewards to be cut in half, the potential for new revenue streams has left us wondering how the space will react to new market conditions. Halvings in the past have generally been associated with prosperity for Bitcoin, but they’ve also been known to shake up previously-held assumptions in a big way. We’re already seeing a few examples of these market changes; just to name one, the larger miners have been modernizing their equipment to ensure maximally efficient hardware. This has led to a fire sale of outdated equipment from these companies, with many thousands of mining rigs finding their way to aspiring miners in Africa and Latin America. The cheap hydroelectricity from Ethiopia has already been attracting international capital to become a new mining hub, and a large portion of these rigs are going there for pennies on the dollar.

In other words, miners are expecting to see less output in the immediate future, but this has nevertheless incentivized the creation of new mining companies worldwide and net growth for the industry. This is just one illustration of the sorts of unexpected opportunities that will take the digital asset space by storm, and it’s up to Bitcoiners to seize on them. For miners as a whole, opportunities are certainly plentiful. March 2024 saw the highest ever monthly revenues for the collective mining industry, just topping $2 billion. This is particularly noteworthy because less than half of this revenue has come from transaction fees, a far cry from the situation in December where transaction fees outpaced mining rewards.

In December, the price of Bitcoin was far lower, and the blockchain was plagued with congestion. Not only did this congestion suppress the demand for buying Bitcoin, but it also raised the demand for miners to process the blockchain. Simply resolving transactions on already-mined Bitcoin made up a larger share of profits than mining and selling new ones, and this enterprise became a lifeline for many smaller firms. Now, however, it seems like the money is flowing all around. Bitcoin ETFs are gobbling up Bitcoin at extreme rates—more than 6x the actual output of miners. The bonanza has even brought venture capital interest squarely back into focus, further increasing the frenzy. In the first three months of 2024, major exchanges collectively saw their reserves of Bitcoin drop by nearly $10…

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