How BTC Mining Profitability May Signal Capitulation

Several variables might affect the efficiency of BTC mining, and these variables have just begun to exert pressure on mining profitability. To make money, miners have to do more work, and the valuation of the cryptocurrency keeps going up, so they don’t make much money from it. Miners need to think about the future from this year when they think about how to ensure their mining business works better.

BTC Mining Profits Have Dropped

The decreasing value of bitcoin has had a significant influence on mine profitability. Antminer S9 and Antminer R9 show that mining profits have decreased over the last several months. The Antminer S9 requires $26K in power to mine one BTC, whereas the Antminer S19 requires $31K in power to accomplish the same task. The price per kWh will be $0.05 as a result of this. It indicates that power rates alone account for over half of the money earned by BTC mining.

Based on the recent valuation of the cryptocurrency, which is $41.8K, an Antminer S9 will generate roughly $15K in cash flow per Bitcoin. At the latest valuations, the Antminer S19 would cost anywhere between $9K and $10K.

It demonstrates how the BTC price’s stagnation places miners’ earnings under severe strain. Mining profitability has suffered due to the increase in total network hash rate after China’s mining prohibition. And if the situation does not improve quickly, profitability will be further strained. The sole way to alleviate this strain would have been for the Bitcoin price to rise.

Miners’ increased investment in expanding capacity is a clear trend as profitability in mining grows. During the Autumn run, the situation was when the cryptocurrency mining capability had skyrocketed, prompting these miners to expand their existing operations. We can expect to see indications of this expanded capability in just a few months.

Despite this, the price of Bitcoin continues to be an important element in mining success. Although the BTC mining challenge may rise, assuming the valuation for that cryptocurrency is significant enough to cover all operational expenses and generate a good profit for miners, the strain will be relieved for them nonetheless.

The Price Of BTC Mining Rigs Has Been Declining

According to Arcane Research’s newest weekly report, Bitcoin mining rigs are currently at their cheapest price since August 2021. It’s advisable to start with the “BTC mining hash rate” indication to determine why this pattern is happening.

This statistic is used to determine a rig’s mining capacity. The hash rate value indicates the number of hashes the computer can execute on the network within a second. As a result, the total Bitcoin hash rate measures the total processing power linked to the Bitcoin blockchain network.

The price per TH/s is used to calculate the rate of a mining rig. The graph below depicts the price change over the last year: The price of sub 38w/TH equipment appears to have dropped significantly over the previous few months, reaching its lowest level since August 2021.

The costs of mining rigs are going down because there isn’t much money to make. The overall BTC hash rate has been stuck near all-time high values for a long time, resulting in fierce rivalry among miners. People who mine Bitcoin are making very small margins because the price of Bitcoin has been going down a lot recently.

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