Bitcoin’s price has fallen below the $7,000 mark this week, causing concern among Bitcoin miners regarding profitability.
Bitcoin bears put Bitcoin miners at concern
Bitcoin mining hardware and its operations are definitely not cheap, and with Bitcoin’s price below 7,000 dollars, many old models of mining hardware have lost their profitability. Although the new models of mining hardware are still economical, what would happen if the bearish trend continues? The uncertainty has created quite a fuss in Bitcoin markets.
The break-even price of mining hardware dictates when the cost of mining is equal to its reward. f2pool shared a list of mining hardware while highlighting which ones were profitable, which ones provided slight profits and which mining hardware are starting to cause loss. The data collected was based on Bitcoin’s current difficulty and an electric price of $0.050/kWh.
The #BTC price dropped below $7000 today 😢 Hopefully we see a recovery soon. Here's an updated BTC Mining Hardware Break-Even Price chart for your convenience, don't forget you can use our Mobile App to get this data in real-time! 🙌 pic.twitter.com/NOHZFdZgb7
— f2pool (@f2pool_official) December 17, 2019
Old mining hardware such as Whatsminer M3 and Ebit E9+ have a break-even price of over 9,000 dollars that is to say they cost more to operate than the income they generate. The drop below 7,000 has put at least seven mining models in jeopardy as their break-even point sits in $6,000s.
Bitcoin mining has a direct effect on the network’s reliability. Higher hash rate means more effort is being put in Bitcoin mining and makes the network more secure. A greater hash rate is often followed by a rise in the asset’s price.
However, the opposite is also true when mining becomes unprofitable; miners often abandon ship, causing a drop in the network’s hash rate. This subsequently leads to a drop in the asset’s price. Regardless, the hash rate of Bitcoin has not taken any damage despite the decline in its price.
Bitcoin miners need to adapt to the price movement and be equipped with proper tools. A recently released generation of miners is said to four times more efficient than Bitmain’s Antminer S9 models. Bitcoin miners and mining pools can look for cheaper fuel costs to balance their finances in times of a bearish market.