Bitcoin Halving Drives Massive Exodus of Old Mining Machines from the United States, Primarily Expanding to Africa and South America

Bitcoin Halving Drives Massive Exodus of Old Mining Machines from the United States, Primarily Expanding to Africa and South America

Bitcoin Halving Drives Massive Exodus of Old Mining Machines from the United States, Primarily Expanding to Africa and South America

According to Bloomberg, about 6,000 old Bitcoin mining machines in the United States are about to be idle and sent to a warehouse in Colorado Springs. These mining machines will be refurbished and resold to overseas buyers seeking to mine profitably in low-cost environments.

The “halving” event in late April will reduce miners’ main source of income – mining rewards. Miners will try to mitigate the impact by upgrading to the latest and most efficient technology. Since electricity costs are the biggest expense, publicly listed mining companies like Marathon and Riot Platforms need to reduce costs to maintain profitability. Their old mining machines may still be profitable, but the possibility is unlikely in the United States.

According to Ethan Vera, COO of Luxor Technology, a Seattle-based crypto mining service and logistics provider, an estimated 600,000 S19 series mining machines (the majority of currently used machines) are being moved out of the United States in large quantities, mainly to Africa and South America.

Jaran Mellerud, CEO of Hashlabs Mining, stated that although operating S19 series and similar models of mining machines in the United States may no longer be profitable after the halving, these machines can still generate considerable profits and extend their lifespan if hosted in certain regions of Africa.

According to CoinMarketCap data, as of the time of this article’s publication, there are only 26 days left until the Bitcoin mining reward halving.

Price Decline
Lauren Lin, Director of Business Development at Luxor, stated that some buyers are planning to purchase old mining machines after the halving, as they believe that prices will further decline by then. According to Luxor, in March 2022, the price of a second-hand S19 series mining machine was around $7,030. One year later, with the decline in Bitcoin’s price, the price of this equipment sharply dropped to around $900, and this month it has dropped to about $427. It is estimated that after the halving, the price in May will be around $356.

In the United States, some miners choose not to sell their old mining machines but instead move them to areas with lower electricity costs and third-party data centers. Nuo Xu, who owns two mining farms in Texas, will travel to Ethiopia, Nigeria, and several other countries this month to find suitable locations for approximately 6,000 old mining machines.

He said, “There is greater risk for my mining machines in Africa, but I have to move them there. Cheaper electricity costs outside of the United States mean a shorter time required to recoup indirect costs.” Additionally, labor and construction material costs are much lower.

Related report: “Cantor Fitzgerald Report: 11 Listed Mining Companies May Have Difficulty Profiting from Mining Business After Bitcoin Halving.”