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Grayscale: Bitcoin Miners to Lean on Ordinals for Revenue Boost as Halving Cuts Rewards

Ruholamin Haqshanas
Last updated: | 2 min read
Grayscale: Bitcoin Miners to Lean on Ordinals for Revenue Boost as Halving Cuts Rewards
Source: Dalle-3

In the coming months, Bitcoin is set to undergo a significant event known as “halving,” which will reduce the reward for Bitcoin miners who successfully complete a block.

This event, scheduled for mid-April 2024, has historically been viewed as a bullish signal for Bitcoin (BTC), as sustained price increases have often followed previous halvings.

However, analysts at Grayscale cautioned that price bumps post-halving can be influenced by various factors beyond the simple stock and flow analysis.

Challenges For Bitcoin Miners, As More Factors Impact Bitcoin Price


Grayscale analysts pointed out that while scarcity can impact price, other elements, such as broader macroeconomic conditions, also play a role.

They highlighted the example of Litecoin (LTC), a cryptocurrency with a similar halving mechanism to Bitcoin, which did not consistently experience price appreciation after its halving events.

The report suggested that factors beyond scarcity must be considered when analyzing post-halving price movements.

The impending halving presents a significant challenge for Bitcoin miners, as the majority of their revenue currently comes from block rewards.

With reduced block rewards and the growing mining difficulty that reached an all-time high last year, miners may find themselves in a tense position.

To prepare for the upcoming shift, miners have been selling off coins and raising capital, including a planned $750 million equity raise by miner Marathon Digital in the last quarter of 2023.

However, there is a silver lining for Bitcoin miners.

The analysts highlighted the revenue potential of transaction fees related to Ordinals activity on the Bitcoin chain.

So far, miners have received over $200 million in transaction fees from Ordinals, representing around 20% of their total revenue.

As the halving event approaches, Bitcoin miners actively explore avenues to supplement their revenue streams.

While the outcome remains uncertain, the rise of Ordinals and the revenue generated from associated transactions offer a potential boost for miners in navigating the challenges brought about by the halving and evolving mining landscape.

Bitcoin Hashrate to Drop by 20% After Next Halving


JPMorgan has predicted a potential 20% drop in the Bitcoin Network Hashrate following the next halving event scheduled for April 2024.

“We estimate as much as 80 EH/s (or 20% of the network hashrate) could be removed at the next halving (April ’24) as less-efficient hardware is decommissioned,” the bank said in a report last year.

The report also mentioned that the four-year block reward opportunity amounts to approximately $20 billion, based on Bitcoin’s current price.

However, it noted that there has been a significant decrease of around 72% compared to just over two years ago, stating:

“For context, this figure peaked at roughly $73 billion in April ’21 and has fluctuated between $14 billion and $25 billion over the past year.”

As reported, Bitcoin miners are considering hedging options to protect their revenue stability amidst the volatility of the cryptocurrency market.

GSR, a leading firm in the trading and market-making space, is pitching hedging products to provide Bitcoin miners with a more predictable income.

By offering these tools, GSR aims to make the $500 billion Bitcoin network more resilient, ensuring that large operators are not at risk of going under during market downturns.