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An efficiency race among miners
Miners seek to be as efficient as possible in the run-up to bitcoin halving
One of the biggest mining news over the past week was Riot announcing a purchase of 7.6 EH/s with a weighted efficiency of 22.5 J/TH for a total sum of $162.9 million. It also secured an option to buy additional 15.3 EH/s on the same terms.
Riot’s expansion is part of the ongoing race for efficiency among bitcoin miners as they prepare for the 2024 halving, which involves better equipment, lower energy rates, and more optimized uptime. Most pubcos’ mining operations have deployed fleets with efficiency in the 30+ J/TH range since the previous halving and the 2021 bull run. But the decline in bitcoin’s hashprice since 2022 has increased the uncertainties around the next halving.
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Riot, of course, is not the only miner that has been busy upgrading their equipment. CleanSpark recently announced a purchase - its latest in a string of machine purchases since start of the bear market - for a total of 8 EH/s in Bitmain’s S19XPs with an efficiency of 21.5J/TH. Core Scientific laid out in the bankruptcy exit plan last week that it will upgrade its mining fleet next year to keep up with the changing economics. And Marathon has been gradually energizing the S19XPs it has bought since 2021.
According to TheMinerMag’s analysis of the U.S. import records in Q2, Bitmain’s subsidiary in Georgia alone received more than 9.2 EH/s in S19XP since March from its Singapore entity and manufacturing partner in Indonesia.
The charts below map out the bitcoin prices for mining fleets at 22J/TH and 30J/TH efficiency to break even at various scenarios of network hashrate and energy prices. At a median power cost of $0.07/kWh, a 30J/TH mining fleet could face existential threats post-halving unless bitcoin’s price surges to well above $40,000 or bitcoin’s hashrate plunges to below 280EH/s.
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