With the impending Bitcoin (BTC) halving event on the horizon, a significant exodus of outdated Bitcoin mining machines from the U.S. is underway, destined for international markets.
Bloomberg reports that SunnySide Digital, a prominent wholesaler in the crypto mining industry, is orchestrating the shipment of approximately 6,000 older Bitcoin mining machines to a warehouse in Colorado Springs. The company’s plan involves refurbishing and reselling these machines to buyers abroad, particularly in regions offering lower energy costs.
SunnySide Digital’s CEO, Taras Kulyk, attributes this strategic move to the forthcoming halving event, as miners seek locations with minimal electricity expenses. Countries such as Ethiopia, Tanzania, Paraguay, and Uruguay are emerging as prime destinations in the global mining landscape due to their favorable energy pricing.
Luxor Technology data indicates that a substantial portion of the current Bitcoin mining hardware, around 600,000 Antminer S19 series mining rigs, will be relocated out of the U.S., predominantly to Africa and South America.
The Halving Event Dynamics and Equipment Upgrades
The Bitcoin halving event, a fundamental aspect of Bitcoin’s protocol introduced by its anonymous creator, Satoshi Nakamoto, aims to regulate the total supply of Bitcoin by halving the mining reward approximately every four years. As the reward is poised to decrease to 3.125 Bitcoin from the current 6.25, miners are under pressure to optimize their operations.
Despite the challenges presented by the halving, Bitcoin’s value has witnessed substantial growth, currently standing at $65,770, albeit slightly lower than its recent peak of $73,750 on March 14. Analysts, including Michael van de Poppe, attribute this correction to pre-halving peaking and foresee the potential for new all-time highs.
However, the continued use of outdated mining equipment may result in electricity costs surpassing mining revenue, prompting a transition towards more efficient hardware. In response, mining firms are strategically relocating their operations to regions with lower energy costs. Miner Nuo Xu, with operations in Texas, is exploring opportunities in countries like Ethiopia and Nigeria, enticed by the prospect of reduced overhead expenses.
While logistical and shareholder considerations retain some equipment in the U.S., numerous mining companies are heavily investing in new hardware. Industry giants collectively ordering over $1 billion worth of machines since February 2023 signal a concerted effort to adapt to the evolving landscape of Bitcoin mining.
