With Bitcoin now dipping below $55,000, the implications for cryptocurrency mining are quite significant, raising concerns across the industry. In particular, the recent drop in Bitcoin’s value has pushed the operational viability of many mining rigs to the brink.
a report from F2Pool, a leading Bitcoin mining pool, highlights that of the many mining machines in the market, only a handful remain profitable among the current economic conditions.
Adapting to new realities: Market conditions put pressure on miners
F2Pool’s analysis shows that only five ASIC (Application-Specific Integrated Circuits) models can still make profits at current Bitcoin price levels. These include the Antminer S21 Hydro, Antminer S21, Avalon A1466I, Antminer S19 XP Hydro, and Antminer S19 XP.
These machines have a breakeven point of $39,581 to $53,187, making them the last bastions of profitability in the ongoing price decline.
On the other hand, models like the Whatsminer M56S++ are hovering just on the brink, with a breakeven price dangerously close to the current BTC price, highlighting the narrow margins within which miners operate.
⛏️With #Bitcoin If mining is trading below $58,000, what is the current profitability?
At a rate of $0.08/kWh, ASICs with an efficiency of less than 23 W/T operate at a loss.
For more information about mainstream miners, please refer to the table below. photo.twitter.com/hJS1lsVnmK
— f2pool 🐟 (@f2pool_official) July 4, 2024
Meanwhile, the BTC network is reflecting these challenges with a remarkable decrease in hashrate, a measure of the total computing power required to mine and process transactions.
This decline can be partly attributed to less efficient miners closing or scaling back their operations in response to lower rewards following BTC’s last halving, which saw block rewards drop from 6.25 to 3.125 BTC.
Friday saw a negative 5% difficulty adjustment, intended to make it easier for remaining miners to find blocks. This adjustment could be a direct response to the reduced competition and stabilize mining revenues for those still in the game.
Despite these adjustments, overall profitability for miners remains under pressure, with significant effects visible not only on individual operations, but also on the broader market.
Bitcoin drops 10%
BTC has seen a sharp 10% drop over the past week, dropping to a current trading price of $55,177. This significant drop has contributed to a decrease in the global cryptocurrency market capitalization, losing more than $100 billion in the past day.
This downturn has had a huge impact on traders and has led to huge losses. Facts Coinglass reports that 207,067 traders were liquidated in the past day, resulting in total liquidations of $580.18 million. BTC liquidations account for $186.99 million of this amount, mainly coming from long positions.
Main image created with DALL-E, chart from TradingView