The bitcoin mining business is generating ever-growing profits at current prices, and new data suggests a mass miner sell-off is unlikely.
Even at $42,000, Bitcoin is still about 20% more than miners’ costs, as popular Twitter account Venturefounder noted on Jan. 14.
Despite falling $27,000 from its all-time high (ATH) of $69,000, Bitcoin is more attractive to miners than ever. Hashrate, an estimate of total processing power for mining, hit ATH this week.
While some fear the recent drop could force miners to sell, data on how much Bitcoin will cost miners to breakeven has given them fresh confirmation.
According to the Bitcoin Mining Cost Index by Charles Edwards, CEO of wealth management firm Capriole, Venturefounder currently puts miners’ breakeven point at $34,000.
https://twitter.com/venturefounder/status/1482041037942145024?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener
“The worst price drop Bitcoin has ever seen was due to miner capitulation (December 2018, March 2020). If bitcoin falls below mining costs, there is a risk that miners will capitulate. Miners risk capitulation at $30,000 in May. Current mining cost is $34,000, 20% less than current price.”
Therefore, there is no reason for miners to sell their activity – nor the future.
In one post Speaking on Medium on the 2019 indicator, Edwards also notes that the transaction fees awarded to miners give them an additional buffer against falling below mining costs in the spot market.
“Historically, the cost of electricity to mine Bitcoin has provided a floor to the spot Bitcoin price.”
As Bitcoinist reported, miners are actually piling up as Bitcoin consolidates below $50,000.
Instead of selling, miners steadily accumulated 5,000 BTC per day. In fact, this process already took place before Bitcoin met ATH.
This means that worries about impending economic difficulties are not currently weighing on the mining sector.
Bitcoin Hashrate Chart | Source: Blockchain
Worst-case estimates by popular analysts suggest that bitcoin price will not go below $30,000.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…
With the crypto market reaching new peaks, many are eager to discover digital currencies poised…
XYZVerse, blending sports passion with meme energy, is set to make a significant impact, uniting…
Will Bitcoin Crash?" seems to be one of the most controversial questions, as the price…
There’s always that one coin people wish they hadn’t overlooked. For many, Cosmos ($ATOM) is…
Cosmos Developer Interchain Foundation sold 3000 ETH from its ICO today, totaling 21,600 ETH sold…
This website uses cookies.