According to Hash Rate Index researchers, public Bitcoin miners will try to reduce expenses in 2023 by turning private or merging with other companies.
According to industry observers, after a disastrous year for Bitcoin (BTC), public miners will focus this year on bolstering bank sheets and reducing costs.
Bitcoin mining cost reduction will likely lead to public miners going private or merging with other enterprises in 2023, according to Hash Rate Index Bitcoin researchers Jaran Mellerud and Colin Harper.
The analysts said in a blog post titled “10 Bitcoin mining forecasts for 2023” that public miners are burdened with onerous reporting requirements, such as spending millions of dollars on annual reporting.
Following the 90% drop in several Bitcoin mining stocks in 2022, public miners may be able to considerably lower administrative costs by going private or joining with others to share the costs.
Hash Rate Index anticipated a huge restructuring year in the Bitcoin mining business in addition to projecting that 2023 will be the year of Bitcoin miners’ merger. Analysts believe that as Bitcoin miners strive to avoid bankruptcy in 2023, bolstering balance sheets will be a primary goal.
According to the researchers, certain Bitcoin miners’ unsustainable debt levels will force companies to pursue debt restructuring as their only alternative. According to the writers, debt restructuring can entail negotiating lower interest rates or extending the debt’s due dates.
Analysts predict that Bitcoin miners will progressively hedge risks in 2023 by using Bitcoin mining derivatives, such as those that allow miners to sell their future hash rate for a specific hash price. “We will witness a trend of miners attempting to hedge everything that can be hedged, similar to what is expected in more mature commodity-producing businesses,” Mellerud and Harper said.
In terms of broader industry predictions, Hash Rate Index forecasted that the current Bitcoin bear market will likely end in 2023, citing historical BTC price cycles. However, economists believe that a full-fledged bull market will not begin until traditional banking businesses are ready to invest in Bitcoin, which could take another year or two.
Analysts estimate that bitcoin hash rate growth will cease in 2023, while mining equipment will get even cheaper.
Related: More than 53% of BTC’s total hashrate is controlled by two Bitcoin mining pools.
The Hash Rate Index’s Bitcoin mining predictions come as the crypto mining industry faces a huge crisis, with Bitcoin losing almost 60% of its value by 2022. To survive the crypto winter, as much as 100% of public mining businesses have been compelled to sell practically all of the bitcoin that they mined in 2022.