As the highly anticipated Bitcoin halving event approaches in late April, there is a noticeable shift occurring in the mining industry, with outdated equipment being moved from the United States to regions offering more affordable electricity.
This migration is motivated by the necessity to uphold profitability amidst reduced mining rewards and rising operational expenses.
US Bitcoin Miners Ready Themselves for Halving Per a report from Bloomberg, around 6,000 older Bitcoin mining machines are scheduled for decommissioning in the U.S., with plans to refurbish and sell them overseas, particularly in areas with lower energy costs.
Leading this movement is SunnySide Digital, a wholesaler operating out of a 35,000-square-foot facility in Colorado Springs. The company is refurbishing and reselling the outdated equipment to international buyers looking to benefit from mining in more cost-efficient environments. They anticipate receiving and revamping several hundred thousand units around the time of the Bitcoin halving.
With the impending halving set to reduce the mining reward from 6.25 to 3.125 Bitcoin, miners are facing pressure to enhance efficiency to maintain profitability. Consequently, many are opting for newer, more efficient machines, rendering older models less viable, particularly in high-cost regions like the United States.
“It’s a natural shift,” observed Taras Kulyk, CEO of SunnySide Digital, noting that buyers of outdated machines are drawn to regions offering the cheapest power. Kulyk, who has overseen the sale of U.S. computers to miners in countries such as Ethiopia, Tanzania, Paraguay, and Uruguay, stressed that this trend is being accelerated by the approaching halving event.
Bitcoin Miners Head Overseas According to Ethan Vera, COO of Luxor Technology, an estimated 600,000 S19 series computers, constituting the majority of the current mining infrastructure, are relocating from the U.S. to regions mainly in Africa and South America.
Jaran Mellerud, CEO of Hashlabs Mining, pointed out that while older machines may no longer be profitable in the U.S. post-halving, they can still yield returns when hosted in regions with lower electricity expenses.
Despite the risks associated with international relocation, such as transportation costs and security concerns, miners like Nuo Xu feel compelled to move their equipment to areas with cheaper electricity. Xu highlighted the significant disparity in electricity costs between the U.S. and regions like Ethiopia, where costs are substantially lower.
It’s worth noting that not all U.S.-based equipment will leave the country. Publicly traded companies like Bit Digital choose to retain older equipment, utilizing them during periods of high Bitcoin prices to generate profits.
In anticipation of the halving, miners worldwide are investing in new hardware. TheMinerMag, a crypto-mining researcher, reports that major public Bitcoin mining companies have collectively ordered over $1 billion worth of machines since February 2023.
