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After a shocking year for Bitcoin (), public miners will focus on strengthening balance sheets and reducing costs this year, industry analysts say.
Bitcoin mining cost minimization will likely lead public miners to either go private or merge with other companies in 2023, Hash Rate Index’s Bitcoin analysts Jaran Mellerud and Colin Harper predicted.
In a blog post entitled "10 Bitcoin mining predictions for 2023," analysts stressed that public miners are burdened by stringent reporting requirements, for example, spending millions on the production of annual reports.
After many Bitcoin mining stocks plummeted 90% in 2022, public miners could significantly reduce administrative costs by going private or merging with others to share the costs.
At the same time to predict that 2023 will become the year of the merger of Bitcoin miners, hash rate index also expected a year of massive restructuring in the Bitcoin mining industry. Analysts are confident that balance sheet consolidation will be a top priority for Bitcoin miners in 2023 as they struggle to avoid bankruptcy.
Analysts have noted that unsustainable debt levels of some Bitcoin miners will force them to undertake debt restructuring as the only option. Debt restructuring can involve the negotiation of lower interest rates or the extension of debt maturities, the authors add.
Analysts believe, Bitcoin miners will also more and more hedge the risks in 2023 using bitcoin derivative extraction, including those enabling miners to sell their future hash rate for an accurate hash price. 'We are going to see a trend of miners trying to cover all that can be covered, just as is expected in industries producing more mature products," said Mellerud and Harper.
As for broader industry predictions, Hash Rate Index also predicted that the ongoing Bitcoin bear market will likely come to an end in 2023, referring to historical BTC price cycles. However, a large-scale bull market will not start until traditional finance companies are prepared to switch to Bitcoin, which analysts say would take another year or two.
Bitcoin hash rate growth is also likely to slow down in 2023, while mining equipment will become even cheaper, the analysts predicted.
Related: Bitcoin miners see mixed successes in tackling debt-fueled overexpansion crisis
Hash Rate Index’s Bitcoin mining predictions come amid the crypto mining industry going through a major crisis fueled by Bitcoin losing about 60% of value in 2022. As many as 100% of public mining companies have been forced to sell almost all cryptocurrency that they mined in 2022 in order to survive the crypto winter.
