Business
Mining Rigs Profitability Amid Bitcoin Slump
Explore the profitability of mining rigs during the Bitcoin slump. Learn how miners are navigating challenges and optimizing operations for sustainable returns.
Amid Bitcoin (BTC) slumping to the $54,000 mark this week, only five mining rigs are currently profitable for their operators, potentially signaling a “local bottom” in the market.
According to mining giant F2Pool, at an electricity rate of $0.08/kWh, ASICs less efficient than 23 W/T are operating at a loss. A kilowatt-hour (kWh) is the unit of energy consumption for electrical devices.
F2Pool’s analysis indicates that four of Antminer’s mining rigs and one Avalon rig are still profitable as long as Bitcoin prices remain above $53,100. On the other hand, all other mining rigs are currently costing more to operate than the rewards they generate.
Miners play a crucial role in blockchain networks by providing computational power in exchange for tokens as rewards. These rewards are often sold to cover the significant operational expenses associated with mining, with some miners even facing bankruptcy in recent years.
In June, miners were a key source of selling pressure on Bitcoin, with over $1 billion worth of BTC sold over a two-week period when prices fluctuated between $65,000 and $70,000.
Some market observers view the current state of miners’ profitability as a potential indicator of a local market bottom. Dovey Wan, partner at crypto fund Primitive Crypto, emphasized the significance of miners nearing capitulation, with S19 miners breaking even at $52,000, suggesting a favorable setup for a local market bottom.