Revenue from mining has decreased by 15% with the bearish market, according to analysts. The most profitable miners are those of the latest generation that are installed in regions with low electricity costs.
Specialists note that the profitability of Bitcoin mining has not been severely affected by the recent fall in the price of this cryptocurrency. Calculations by the Token Insight and Hut8 firms reveal that mining with the latest equipment found in regions with good electricity rates still generates significant gains.
In recent weeks, Bitcoin’s price has decreased by 18%, reaching USD 6,600 per unit at the time of writing this article. The fall in the price of the cryptocurrency has also affected the profits of miners, which have been reduced by 15%, according to studies by mining blogs. However, this decline in the revenues of the industry does not seem to be such a heavy blow.
The Bitcoin hashrate reveals that there are very few mining machines that have been disconnected due to the bearish market. According to data from Blockchain.com, the hashrate has remained close to its record figure of 102 TH/s reached last October. Currently, Bitcoin records a hashrate of 89.9 TH/s, whose decline could be a product of the dry season in Sichuan, China, and not by the bearish market as such.
It should be noted that while Bitcoin’s price falls, the costs for mining activities continue to have the same high prices. The above may lead to doubt why miners have not disconnected their equipment recently if mining activities are still profitable with the current bearish market.
Mining Stays Afloat
Mining remains profitable despite the Bitcoin crash, according to firms like Hut8 and Toke Insight. The price of electricity, the performance of the miner and even the climate of a region can determine whether a miner survives the bearish market or not. Because of this, each device has a different performance depending on the economic and environmental circumstances.
For example, the Canadian mining firm Hut8 says that the average cost of mining operations is USD 4,400 for the third quarter of 2019. Investor Alistair Milne, on the other hand, indicates that from USD 7,500 to USD 8,000 can be spent to undermine one bitcoin. If we take into account that Bitcoin’s price is currently at USD 7,700, it can be said that mining is reaching the limit of its profitability.
Token Insight consultants believe that profitability currently depends on electricity rates and the type of device used for mining. A basic miner in a region whose electricity rate is USD 0.05 per kWH can generate expenses of USD 2,500 per mined BTC and the latest-generation one up to USD 6,500. Analysts note that, by adding the costs of the refrigeration and maintenance system, mining in these types of regions can become unfeasible.
On the other hand, if the miner is located in an area like Kazakhstan, electricity rates of up to USD 0.03 per kWH can be obtained. The latest generation miners can generate electricity bills of up to USD 1600, considering the costs of the refrigeration system. Similarly, they believe that basic mining equipment can record an operating cost of USD 3,000.
Operating expenses may be even lower if the miner is located in a cold-weather region. Temperatures below -2 degrees Celsius help keep mining equipment refrigerated without the need for expensive additional cooling infrastructure. In this way, many mining farms generate higher profits per mining.
By Willmen Blanco