In preparation for the upcoming Bitcoin halving event in April 2024, miners in the United States are making significant adjustments to ensure their profitability. With the event expected to slash mining rewards in half, miners are upgrading their equipment and exploring new locations with cheaper energy costs.

According to Luxor Technology, a crypto-mining services and logistics provider, approximately 600,000 S19 series mining rigs, which make up a large portion of machines currently in use in the United States, are being moved out of the country. These mining computers are being transferred or sold primarily to countries in Africa and South America, as reported by Bloomberg.

The decision to move the mining machines is driven by the higher energy costs in the United States. The S19 series, being older models of Bitcoin mining machines, may not be cost-efficient to operate in a country where energy costs are relatively high. Miners are opting to switch to more efficient models to maintain profitability.

Luxor's report highlighted that although the S19 series and similar models may not be cost-effective to operate in the United States, they can still generate decent profits and have an extended life if hosted in certain regions in Africa. This has led to an influx of buyers, particularly from countries such as Paraguay, Uruguay, Tanzania, and notably, Ethiopia.

Ethiopia, situated in the Horn of Africa, has emerged as a significant destination for these mining machines. The country's reputation in the crypto and Bitcoin mining niche is growing, with a substantial number of the old US machines being transferred there. The main driving factor is Ethiopia's cheap electricity, which costs approximately 3 cents per kWh compared to the US, where it ranges between 3 to 6 cents.

In fact, Chinese crypto mining companies have also increased their investment in Ethiopia, as reported by Bloomberg in February. While China's strict stance on cryptocurrency may have played a role, Ethiopia's affordable power seems to be the primary motivator behind their move.

With the Bitcoin halving event on the horizon, Luxor estimates that around 600,000 S19 bitcoin rigs, constituting the majority of machines currently in use, are being relocated primarily to Africa and South America. This shift to regions with cheaper energy costs is expected to enhance the profitability and longevity of these mining machines.

As the countdown to the halving event continues, the behavior of buyers in the market is being influenced by the anticipated price drop of older mining computers. Luxor revealed that some buyers are waiting until after the event to purchase these machines at potentially lower prices.

The shift of Bitcoin mining machines to Africa and South America signifies the global nature of the cryptocurrency industry. As miners adapt to changes in the sector, the search for cost-effective energy sources takes them to regions where bitcoin mining can remain a profitable venture.