One article understands the impact of Bitcoin halving, and the competition among miners is even more intense

Mining company Bitdeer announced its fourth quarter (Q4) financial report for 2024 on February 25, but the results were not as expected, causing the stock price to plummet by more than 28% on the day, falling from $13.10 per share to about $9.26. According to the financial report, Bitdeer's Q4 revenue was US$69 million, a decrease of nearly 40% from the same period in 2023, and its net loss expanded to US$530 million, a significant increase in losses compared with a loss of only US$5 million in Q4 2023.

The company pointed out in its financial report that the decline in performance was mainly affected by the Bitcoin halving in April 2024. This incident directly cut the miners' Bitcoin mining income, coupled with the increase in global computing power and rising R&D costs, making the company's operations more difficult.

Bitcoin halving effect fermented, and competition among miners became more intense

Bitcoin will conduct a "halving" every four years, that is, the Bitcoin reward for each block is reduced by half. The halving in April 2024 reduced the miners' reward from 6.25BTC to 3.125BTC, directly affecting the income of mining companies.

Bitdeer's strategic director Harris Bassett said in the earnings call: "Our performance in 2024Q4 is worse than in 2023Q4, mainly due to the halving. In addition, the increase in global computing power and the increase in R&D costs have also become key factors." The difficulty of Bitcoin mining has increased, and market competition is intensifying:

• Global Bitcoin computing power reached a record high in January 2024, breaking through 1,000EH/s (Exahashes per second), which means that more mining machines are competing in the market, making it more difficult for miners to make profits.

• When the number of miners increases, the difficulty of mining increases. However, Bitcoin rewards were halved, and many mining companies' revenues declined and profit margins became smaller.

Bitdeer has launched a new strategy to switch to its own mining machine market

Faced with the impact of Bitcoin halving, Bitdeer has also begun to adjust its business model. It no longer relies on mining alone, but also invests in the development of its own mining machine (ASIC) technology, hoping to increase revenue by selling high-efficiency mining machines. "We deliberately focus our resources on developing our own ASIC mining machine technology. Although this has temporarily limited our computing power growth, it will bring huge advantages in the future and make us unique in the industry," Bassett said.

The current global ASIC mining machine market size is about US$4 billion to US$5 billion. Bitdeer is expected to start selling its own mining machines on a large scale "in the next few months", hoping to fill the losses caused by the decline in mining revenue.

Bitcoin miners are looking for new ways out, and their AI business has attracted attention.

In addition to developing their own mining machines, many Bitcoin mining companies have begun to diversify their businesses and enter AI chip manufacturing and computing services to reduce their dependence on Bitcoin price fluctuations. After Bitcoin is halved, the following are the new choices for miners:

• Produce and sell mining machines (ASICs): Bitdeer develops its own mining machine technology.

• Providing AI computing services: Many mines have begun to rent idle computing power to run AI models, similar to cloud computing services.

• Turn to other blockchain mining: Some miners are considering turning to more profitable blockchains, such as Ethereum or other PoW mechanism cryptocurrencies.

"As Bitcoin mining profits shrink, the future development of miners will focus on AI computing and ASIC chip markets, which will become the key to survival after the halving," said Bitdeer.

Other miners will also announce their financial reports, and the market is paying close attention to the financial reports of other large mining companies to see how much impact the Bitcoin halving has on the overall industry. Bitcoin mining companies Marathon Digital and Core Scientific are expected to release their financial reports on February 26. Investors will further evaluate the impact of Bitcoin halving on miners and the possible adjustment strategies of miners in the future.

The impact of Bitcoin halving has not subsided, and mining companies have transformed into AI and mining machine markets to survive

Bitdeer's revenue fell by 40% and its stock price plummeted by 28%.

• Global computing power hits a new high, mining competition is fierce, and mining companies have less profit margins.

• Bitdeer launches its own ASIC mining machine, hoping to increase revenue through hardware sales.

• AI computing and ASIC chip markets have become a new battlefield for mining companies, and many operators have begun to diversify their operations.

• The market focuses on the financial reports of Marathon Digital and Core Scientific to evaluate the impact of Bitcoin halving.

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