Using Bitcoin as a working asset to survive for miners
According to a report by the cryptocurrency company Wintermute, miners who want to survive the difficult period after the next Bitcoin halving need to treat their Bitcoin holdings as a working asset, not a passive reserve.
Halving is the process where the reward for Bitcoin mining is cut in half approximately every 4 years. The next such event is expected in 2024, which will lead to a significant decline in miners' revenues. To adapt to these changes, Wintermute recommends that miners use their Bitcoin assets more efficiently.
'Miners who view their Bitcoin holdings as a working asset rather than a passive reserve will carry a structural edge into the next halving,' the report states.
The company's analysts believe that miners can generate additional income, for example, by participating in lending, arbitrage, or other DeFi activities. This way, they will be able to offset the reduction in mining rewards.
Context for Russian miners
Russian miners are among the largest in the world, accounting for about 11% of the global Bitcoin hashrate. After the mining ban in China in 2021, many Chinese companies moved their capacities to Russia, strengthening the country's position in this market.
However, in 2022, due to economic sanctions against Russia, Russian miners' access to international financial systems and markets is severely limited. Therefore, Wintermute's recommendations on the active use of Bitcoin reserves are especially relevant for Russian players seeking to adapt to the new realities.
Conclusion
Wintermute's forecast indicates that to survive the upcoming halving and economic sanctions, miners, including Russians, need to rethink their approach to Bitcoin assets. Using them as working capital rather than passive reserves may become a key success factor in the upcoming challenging period.