Bitcoin Mining: A Risky Chicken Race for Miners happening in 2024

Bitcoin Mining A Risky Chicken Race for Miners

In the world of cryptocurrency, Bitcoin mining is a highly competitive business. As the price of Bitcoin continues to fluctuate, miners face many challenges, including rising energy costs and increasing difficulty in mining.

The situation is expected to worsen in April 2024, when mining rewards will be reduced, and miners will face a dangerous chicken race to survive.

The high-stakes chicken race

As the mining business becomes less profitable, miners are forced to participate in a high-stakes chicken race. Their goal is to have a strong financial base that will allow them to stay in business longer than anyone else, even as profits dwindle.

However, as the number of coins given as rewards is periodically halved, mining profits will be greatly reduced in the spring of 2024.

The more other miners give in and leave the network, the more coins the remaining miners will get. But this puts even more pressure on miners to become more efficient and to cut costs.

Those who are currently struggling will not survive the halving, according to Jeff Barkey, the Vice President of Business Development at Foundry, which operates a marketplace for mining hardware.

Investing in better hardware, cooling technology, developing software that can closely monitor machine performance, moving to areas with cheaper electricity, renegotiating loan terms, or any other way to increase profit margins are all options that miners can consider.

Companies like Geosyn Mining are aiming for vertical integration of their business by building their own solar power plants to power the machines.

“As an industry, we need to think deeply about how to avoid risk,” says Caleb Ward, the CEO of the company. “It’s not enough to just work towards big goals.”

A series of withdrawals and bankruptcies of miners

Miners who are unable to fine-tune their operations due to financial pressures are forced to bet on bitcoin price increases that may never materialize.

This situation is leading to a series of withdrawals and bankruptcies of miners who cannot keep up with the competition.

The advantage of the halving is that it puts more pressure on the industry to become more efficient. But some companies borrowed large sums of money at high interest rates (10% to 20%) to expand their businesses when the market was booming.

Now, the current value of the mined coins makes it impossible to repay them, leading to bankruptcy.

The illusion that prices will continue to rise

Historically, the price of Bitcoin has risen sharply due to a “buying” frenzy, followed by a sharp decline and a gradual rise.

This process is commonly known as the Bitcoin Cycle, although there is no guarantee that this cycle will repeat itself in the future.

However, some miners, like Jaime Leverton, the CEO of miner Hut 8, made a fatal mistake in thinking that the 2021 surge was different from this cycle.

They believed that the industry had entered a “super cycle” where prices would continue to rise continuously, breaking the cyclical nature of the past. Many believed this and were caught off guard when the market crashed.


The world of Bitcoin mining is a dangerous chicken race for survival, where miners are forced to become more efficient and cut costs to remain competitive.

However, the situation is expected to worsen in April 2024 when mining rewards will be reduced. Miners who cannot keep up with the competition and the changing market conditions will face withdrawal and bankruptcy.

To survive, miners must think deeply about how to avoid risk and invest in ways to increase their profit margins.