Skip to main content

Sales by miners unlikely - Bitcoin mining profitable despite weak prices

 


The production costs for mining are 34,000 US dollars and therefore still offer the miners a lot of breathing room despite weak prices.


Despite weak prices, Bitcoin ( BTC ) mining is currently more profitable than ever, which makes further pressure to sell all the more unlikely.


As Twitter account @venturefounder noted in this regard on Jan. 14, at $42,000, BTC/USD is still nearly 20% above the average production cost of “mining” the market-leading cryptocurrency.


No surrender, no downturn

Although BTC is now back $27,000 off the applicable record high, mining is more attractive than ever. It is therefore hardly surprising that the hash rate , i.e. the computing power of Bitcoin made available by the miners, reached a new record this week .


While some naysayers fear that further losses could prompt miners to give up, a simple calculation takes the wind out of their sails.


For example, Charles Edwards, the CEO of asset management company Capriole, calculated using the "production cost indicator" for Bitcoin mining that the breakeven point for miners is currently just $34,000.


“The really bad downturns only happen when miners are forced to capitulate (like in December 2018 or March 2020). As soon as the Bitcoin price slips below the production costs, miners are usually forced to give up," Edwards explains. To which he adds:


“For example, in May, BTC was under threat of capitulation when it was at $30,000, but right now production costs are at $34,000, which is still well below the current price.”



So the miners operate profitably because their costs are lower than the possible return, so there is no reason for them to sell or even capitulate.


In a 2019 blog post, Edwards also pointed out that miners are also credited with transaction fees, giving them another cushion to maintain profitability.


"Historically, the energy expenditure or the electricity costs for mining are the minimum price of Bitcoin," as he explained at the time.


Miners defy the weak courses

Indeed, as Cointelegraph reported, despite the weak price, miners are far from hitting the sack.


Rather than mass selling , miners are hoarding their BTC, suggesting their long-term optimism.


Even the macroeconomic difficulties that are on the horizon have not dragged the mining industry down noticeably so far.


However, even the most pessimistic forecasts do not assume that BTC will slip below $30,000 in the near future, which makes the risk for the miners all the more calculable. 

My Top Picks
Honeygain - Passive earner that pays in BTC or PayPal
MandalaExchange -The Best no KYC crypto Exchange! 
BetFury - Play And Earn BFG for daily Bitcoin and ETH dividends!
Pipeflare - Faucet that pays in ZCash and Matic, Games pay in DAI
Womplay - Mobile dApp gaming platform that rewards in EOS and Bitcoin
Cointiply - The #1 Crypto Earning Site
Torum - Join the latest Social Network and earn TRM for Free! 
LiteCoinPay - The #1 FaucetPay earner for Litecoin 
Upland - Collect Digital Properties & Test Your Skills
LBRY/Odysee - YouTube Alternative that lets you earn Money by viewing videos!
FaucetPay - The #1 Microwallet Platform
FREEBTC - The #1 FaucetPay earner for Satoshi's
FaucetCrypto - An earning/faucet site that pays out instantly
FireFaucet - An earning site that pays better for some than Cointiply
DogeFaucet - Dogecoin Faucet
xFaucet - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, FEY - Claim every 5 minutes
Konstantinova - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, USDT, FEY, 25 Claims Daily

Comments

Post a Comment

Popular posts from this blog

From offchain to offchain: Statechains meets Lightning

  Without a doubt, the most significant off-chain Bitcoin solution is the Lightning network. But in its wake, the statechain has emerged as an intriguing replacement. There is currently a proposal to link the two offchain networks. From an ocean, for example, you can see sunbeams glistening in the water, waves rippling, and possibly a jellyfish drifting toward the light. But you only see a small portion of it. The distance from the sea's surface to its bottom is hundreds of meters. It has dozens of different fish species swimming in it, crabs and starfish crawling on the bottom, shells clinging to rocks, and sea plants climbing up. A completely new world starts where your gaze diverges. You can picture a blockchain like Bitcoin, just like the sea. What you see on the outside is only a small portion of what is actually there; the set of UTXOs (coins) and transaction history that full nodes store are just the beginning of a much larger world. It's the plan, at least. With Bitcoin...
Post a Comment
Read more

Phishing attack on popular crypto sites tries to empty wallets

  Several major crypto sites such as Etherscan, CoinGecko, DeFi Pulse, and others report malicious pop-ups scammers use to try to trick users into connecting their MetaMask wallets. The phishing attack came from a domain displaying the Bored Ape Yacht Club (BAYC) logo. "We are investigating the root cause of this attack to fix the threat as soon as possible," CoinGecko founder Bobby Ong tweeted. The phishing attack appears to have been triggered by a malicious ad script from Coinzilla, a crypto ad network, according to CoinGecko. Etherscan also advises its users not to confirm any transactions that may appear on the website. The attackers attempted to use the hype around the “bored monkeys” non-fungible tokens (NFT) to gain access to the cryptocurrencies of unsuspecting website visitors. Although the websites affected by the scam attempt have reacted in the last few hours and deactivated the advertising pop-up, it is still recommended not to connect your MetaMask wallet to ne...
Post a Comment
Read more

Bored Ape Yacht Club NFTs stolen through phishing on Instagram

  Bored Ape Yacht Club ( BAYC ) developers announced on Monday that hackers have hijacked the official Instagram page of the popular NFT collection and posted links to a fake airdrop. Crypto enthusiasts who connected their MetaMask wallet to the rogue website subsequently had their Ape NFTs stolen. Apparently, the attack was planned to coincide with the one-year anniversary of the BAYC collection. This increased the "perceived credibility" of the phishing link. About 100 NFTs are said to have been stolen in the phishing attack . According to CoinGecko data , the minimum price for a BAYC NFT is 139 Ether ( ETH ) or $400,726. So if reports are correct, over $40 million worth of NFTs were stolen in the attack. These numbers are only the lowest estimate, however, as they are based on the lowest price.  At the time of writing, it was still unclear how the hackers gained access to BAYC's official Instagram account. Social media users have pointed out the importance of two-fact...
Post a Comment
Read more