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As the long-awaited Bitcoin halving event approaches in late April, older mining equipment is being moved from the United States to regions with lower electricity costs.
This transition is being driven by the need to maintain profitability due to declining mining rewards and rising operating costs.
US Bitcoin miners prepare for halving
According to a report by Bloomberg, approximately 6,000 aging Bitcoin mining machines are scheduled to be retired in the United States, with plans to refurbish and resell them overseas, particularly in regions with lower energy costs.
Wholesaler SunnySide Digital is at the forefront of this movement, operating a 35,000-square-foot facility in Colorado Springs. The company refurbishes aging equipment and resells it to overseas buyers who value mining in more cost-effective environments. They expect to receive and renew hundreds of thousands of units around Bitcoin’s halving.
The impending halving will reduce the mining reward from 6.25 Bitcoins to 3.125 Bitcoins. As a result, miners are under pressure to maximize efficiency to maintain profits, with many turning to newer, more efficient machinery, especially in countries like the United States. In high-cost regions, older models are struggling to survive.
“This is a natural transition,” said Sunnyside Digital CEO Taras Kulik, noting that buyers of older machines gravitate to areas with the most affordable power. Kulik, who has been promoting the sale of American computers to miners in countries such as Ethiopia, Tanzania, Paraguay and Uruguay, stressed that the impending halving event is accelerating this trend.
Bitcoin miners gather overseas
According to Ethan Vera, COO of Luxor Technology, an estimated 600,000 S19 series computers, which make up the bulk of the current mining infrastructure, are being relocated from the United States to regions primarily in Africa and South America.
Jalan Merelud, CEO of Hashlabs Mining, said that while older machines may no longer be profitable in the U.S. after the halving, they can still be profitable if hosted in areas with lower electricity costs. Point out that there is a possibility.
Despite the risks associated with international relocation, such as transportation costs and safety concerns, miners like Nuo Xu are forced to move equipment to areas where electricity is cheaper. Xu highlighted the huge difference in electricity prices between the United States and regions like Ethiopia, where costs are significantly lower.
Notably, not all U.S.-based equipment leaves the country. Publicly traded companies like Bit Digital are choosing to hold on to their old equipment and leverage them to generate profits when Bitcoin prices soar.
Miners around the world are investing in new hardware in preparation for the halving. The crypto mining researcher TheMinerMag reports that since February 2023, his major public Bitcoin mining companies have collectively ordered machines worth more than $1 billion.
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