Bitcoin Halving Could Push US Miners Offshore

The upcoming Bitcoin halving could potentially lead to a decline in share prices for high-cost public miners in the US, forcing some to consider moving their operations offshore.


Potential Impact on US Miners

Jaran Mellerud, the founder and chief mining strategist of Hashlabs Mining, predicts a "mining stock blood bath" if the price of Bitcoin does not rise substantially after the halving.

Investors may realize that these mining companies are barely making money, which could result in a decline in share prices.

Mellerud is closely monitoring the three to four-month period after the halving to assess the profitability of miners, considering the reduction in block rewards.

Previous Halving Events

Historically, Bitcoin halving events have been followed by a surge in the price of Bitcoin.

For example, after the halving in May 2020, Bitcoin's price increased by over 430% in the following five months.

However, if Bitcoin fails to make a significant price run within the three to four-month interval after the halving, there could be a significant number of miners turning off their machines.

Shifting Hash Rate to Cheaper Electricity Countries

According to Mellerud, if profitability declines for US miners, there may be a shift in Bitcoin's hash rate to countries with cheaper electricity rates.

He specifically mentions Ethiopia, Nigeria, Kenya, Argentina, and Paraguay as countries that could attract more hash rate in the coming years.

Some US-based miners have already shown interest in moving their machines to Ethiopia due to the significantly lower hosting rates.