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Bitcoin (BTC) price recently fell below $55,000, impacting the cryptocurrency mining world significantly. According to data from mining giant F2Pool, very few mining devices managed to remain profitable during this challenging market period. This situation potentially signals a market bottom and suggests a price recovery might be near.
Price Drop Increased Miners’ Costs
Bitcoin miners, who provide computational power to the Bitcoin Blockchain network in exchange for newly minted BTC rewards, face increased operational costs due to the price drop. These costs primarily stem from the high energy consumption required to run mining devices. With Bitcoin’s price falling to $53,000, only five mining devices remained profitable, indicating a significant financial burden on miners.
F2Pool’s analysis reveals that all mining devices less efficient than 23 watts per terahash (W/T) at an electricity cost of $0.08 per kilowatt-hour (kWh) are now operating at a loss.
Moreover, F2Pool’s recent data highlights a stark reality. Only four Antminer models and one Avalon model remain profitable, provided Bitcoin stays above $53,100. Currently, for all other mining devices, the electricity cost exceeds the value of the BTC produced. This situation adds financial pressure on miners, many of whom must continuously sell their mined BTC to cover high operating expenses.
Price May Be Near Bottom
Miners’ selling pressure has been a significant factor in the cryptocurrency market. In June alone, miners sold $1 billion worth of BTC within two weeks, causing selling pressure as the price fluctuated between $65,000 and $70,000. This selling pressure was a critical driving force behind recent price drops and contributed to increased volatility in the cryptocurrency market.
However, some market analysts consider miners’ current unprofitability as a potential indicator of a price bottom. As miners approach the point where they can no longer sustain operations, selling pressure is expected to decrease. Dovey Wan, a partner at the crypto fund Primitive Crypto, highlighted this reality in a recent social media post. Wan suggested that the breakeven point for the popular S19 mining device is $52,000, indicating that current price levels are approaching a critical threshold.
