As a researcher with experience in the crypto mining industry, I find the current state of Bitcoin mining profitability quite concerning. The latest update from f2pool reveals that only five miners remain profitable with Bitcoin trading below $58k, and even then, they are operating at slim margins. This situation is further compounded by the fact that less efficient ASICs are now operating at a loss.
Five miners continue to turn a profit with bitcoin‘s price dipping below $54,000, according to crypto mining company f2pool. The miner shared on Reddit that, considering an electricity cost of $0.08 per kWh, ASICs (Application-Specific Integrated Circuits) less efficient than 23 watts per terahash (W/TH) are no longer profitable at this price point. The post also included a graph illustrating the profitability of miners in this price range.
Source: f2pool on X
With Bitcoin asset prices dipping below the $54,000 mark, only a few Antminer and Avalon rigs continue to generate profits. All other mining equipment is currently incurring losses. Consequently, miners may be forced to sell their Bitcoin holdings to meet operational expenses. Last month alone, Bitcoin miners had to offload over $1 billion worth of assets during a two-week period as the price plunged from $70,000 to $65,000.
As the largest blockchain network underwent its halving event this year, reducing my rewards from 6.25 to 3.125 bitcoins per block, I observed many miners being compelled to sell their holdings to meet operational expenses due to decreased profitability. This mechanism, designed to maintain Bitcoin’s deflationary nature, unfortunately pushes some miners away from the network.
As a crypto investor, I’ve noticed that some miners have struggled in the past due to insufficient rewards, leading them to file for bankruptcy. This challenge is more pronounced now than ever before, as block rewards are at an all-time low and will continue to decrease every four years.
Wealthier mining companies are buying up smaller ones to expand their mining capabilities and maximize the number of blocks they can mine. This strategy provides greater rewards and keeps them competitive. Unfortunately, this is a luxury not all Bitcoin miners can afford, making it challenging for them to turn a profit in the short term.
Image by Aaron Olson from Pixabay
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2024-07-06 14:18