With global uncertainty still lingering around cryptocurrencies, experts seem to wonder how Bitcoin (BTC) mining will pan out in 2023. It is believed that 2023 will witness competition intensifying in the BTC landscape over electricity and price constraints.
Insights from The Block, a research-based company, stated that BTC miners clocked $667 million in June, 2022, and $555 million in July, 2022, which showed a 16.7% drop in BTC mining earnings. “The BTC mining landscape is expected to become more competitive and efficient in 2023. This trend is likely to lead to industry consolidation, with smaller players forced to exit the market or merge with larger players. Increased competition is expected to drive innovation as miners adopt new technologies to increase efficiency and lower costs,” Rajagopal Menon, vice-president, WazirX, a cryptocurrency exchange, told FE Blockchain.
According to market behaviour, 2023 will emphasise the usage of BTC mining derivatives. Furthermore, BTC mining companies are expected to cut down on their costs and focus more on developing services. As stated by Sofi Learn, a financial platform, in January, 2023, it was found that a BTC miner earns 6.25 BTC upon successful validation of a new block on BTC’s blockchain. On an average basis, 900 BTCs are mined on a daily basis which should take the total BTC number for 2023 to 328,500.
“In 2023, companies are expected to respond to market conditions by continuing to seek out cost-saving measures and improving efficiency. This could include exploring new and innovative technologies, optimising their energy usage, and seeking out favourable regulations in countries with lower energy costs,” Suman Bannerjee, CIO, Hedonova, An US-based hedge fund, highlighted.
Market reports suggest that rise in BTC price, which crossed the $21,000 mark in January, 2023, will support BTC mining companies in terms of revenue generation. The turnaround has reignited the belief among investors that crypto winter market implications are heading for an end, and that BTC mining will increase in terms of profitability. As stated by CoinDCX, a crypto investment application, BTC price may close monthly trade at nearly $25,000 for Q1, 2023. Reportedly, BTC mining companies such as Canaan, Bitmain, MicroBT, among others, are at the forefront of BTC mining space for 2023.
Moreover, future predictions indicate that BTC mining prospects post 2023 will be dependent on factors such as technological advancements and a global regulatory environment. On the basis of CoinMarketCap, a crypto price-tracking website, future of cryptocurrency mining’s evolution will be beneficial in terms of derivative products, gamification of mining companies, and creation of energy efficient chips. “As the Bitcoin network continues to grow and mature, I believe mining will become complex, requiring advanced equipment and energy-efficient mining practices. Eventually, the future of Bitcoin mining will depend on the evolution of the cryptocurrency industry and the growth of the Bitcoin network,” Vikram R Singh, CEO, Antier, a blockchain-based platform, concluded.