Experts said in a Wednesday Twitter Spaces hosted by CoinDesk as part of its Mining Week 2023 that computing power on the Bitcoin network, known as hashrate, could drop by as much as 30% after the next halving event in April 2024. Lucas Pipes, Managing Director at investment bank B. Riley Financial, estimated a 15% to 30% decline in Bitcoin’s hashrate, said Colin Harper, head of content at mining services firm Luxor Mining. Harper said a 20% drop was possible.
The halving event is a way of controlling the blockchain’s supply economics, and the next halving will lower the reward to 3.125 BTC per block from the current 6.25 BTC. This would lead to miners that are not profitable to shut off their machines and, in turn, lower hashrates for the network. To combat this, miners have been upgrading their fleets to newer generation machines, which require less power to mine a block successfully.
Hashrate has been increasing in the past year as more machines are coming online, and the efficiency of machines has roughly doubled every five years.