EXCLUSIVE: Marathon, Riot, Hut 8 CEOs Tell Benzinga How Bitcoin Halving Will Impact Miners

The so-called Bitcoin halving is nearly upon us.

Once it occurs, presumably later this month, the rate at which bitcoins are minted will be reduced.

Benzinga asked the CEOs of three mining companies — Riot Platforms Inc RIOT, Marathon Digital Holdings Inc MARA, and Hut 8 Corp HUT — what their thoughts are concerning this preordained event. Here’s what they had to say.

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Riot

“The Halving immediately cuts revenue in half while doubling costs for miners,” Riot CEO Jason Les says. “Depending on your power cost and machine efficiency, some miners will be uneconomic and will be forced to shut off, decreasing network hash rate by at least 5% and possibly more depending on the trend for BTC prices.”

As the network hash rate decreases, low-cost miners will benefit as their share of the network and rewards increases without expanding more capital or energy, he adds.

The Castle Rock, Colorado-based company, formerly Riot Blockchain, develops, operates and supports blockchain technologies. And, according to Les, it has been planning for the Halving for several years.

“We continued building infrastructure during the last downturn, and are positioned to grow our self mining hash rate by over 150% this year. As such, Riot is one of the few, if not only public miner that will exit this year mining more BTC daily than it was prior to the halving,” he says. “Coupled with our unique power strategy in Texas, which resulted in power costs of 2.2 cents per Kwh in 2023. Riot is positioned as the lowest-cost producer in the space. This will allow us to run all machines post-halving and continue to have positive gross margins post-halving.“

Overall BTC price: Post-halving, Bitcoin tends to begin or extend the bull market cycle, Les says. Prior data suggests that BTC price should double prior highs ~18 months post-halving. Riot believes the approval of the spot Bitcoin exchange-traded funds (ETFs) has brought price discovery forward by about six months. Expect BTC to continue to trend higher post-halving as demand outstrips supply.

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Marathon Digital

Marathon Digital CEO Fred Thiel predicts “Marginal cost to mine BTC will increase with energy spend required doubling. “

At current prices, most miners will still be profitable post-halving “unless their fleet of rigs has an energy efficiency above 30J/TH,” he adds.

Marathon's fleet has an average energy efficiency of ~24J/TH (declining further over the balance of the year with the addition of even more efficient miners). That’s “well below the threshold,” Thiel adds.

Las Vegas-based Marathon has recently taken ownership of over 50% of its mining capacity. As a result, it reduced operating costs at the owned and operated sites significantly by eliminating the third-party operators.

Overall BTC price: “Bitcoin ETFs have accelerated the price surge post halving by [six] months in the form of the demand shock that seems to continue unabated. Continued limited liquidity and supply decrease resulting from the halving will likely cause continued upward price pressure on BTC,” Thiel says. “According to many experts, institutions have yet to buy ETF shares in any volume. And if and when that starts, the demand will likely keep pushing [the] price upwards and will provide a stable floor.”

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Hut 8

“We view the halving as a great opportunity to double down on growth and strengthen our competitive position,” Hut 8 CEO Asher Genoot says. “We have prepared for the halving with a comprehensive restructuring of the business and focus on being a low-cost operator.”

Hut 8 mines “only when it is profitable” using its proprietary software. The Miami-based company also maintains a strong balance sheet with more than 9,100 BTC.

“That enables us to maintain stability while investing in growth,” Genoot adds. “Post-halving, as inefficient operators shut down and distressed assets come to market at attractive valuations, we see an opportunity to cement our position and scale through the downturn.”

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