Bitcoin miners have increased their energy consumption significantly as they prepare for the upcoming halving event, aiming to maintain a speedy mining rate. According to a recent report from Bloomberg, the energy usage by Bitcoin miners has reached an all-time high over the past month. This surge in mining activity aligns with a supply shortage, which has contributed to the sustained and rising prices of Bitcoin.
The report highlights that Bitcoin miners are intensifying their energy usage due to concerns about potential revenue disruptions from upcoming code updates. This heightened activity reflects a survival mindset among miners following challenges faced during the recent cryptocurrency market downturn. Estimates from Coin Metrics indicate that miners consumed a record 19.6 gigawatts of power last month, representing a substantial increase compared to the same period in 2023, with a surge of over 61% according to calculations by CoinGape.
Additionally, data provided by TheMinerMag based on public filings reveals that major mining companies have invested over $1 billion in specialized mining equipment since February 2023. This surge in equipment demand is driven by increased mining activity, fueled in part by the launch of Bitcoin ETFs. The resulting supply shortage has led to a significant discrepancy between Bitcoin demand and supply.
As the halving event approaches, Bitcoin miners face the prospect of reduced block incentives, as the event halves the number of new coins entering circulation every four years. This reduction in block rewards incentivizes miners to maintain a steady mining rate to compensate for the decreased rewards. The scarcity of Bitcoin resulting from halving often leads to increased demand, potentially driving up its value. Consequently, investors may be willing to pay premium prices for Bitcoin due to its limited supply, further fueling the demand for mining activity even after the halving event.