Miner Weekly: Who're mining at a loss?
A $14k BTC price will bring more pain to bitcoin miners
Bitcoin's price is down again – thanks to benevolent billionaires who go by their initials. With the bitcoin network's hashrate hitting 270 EH/s, the hashprice has plunged to $60 per PH/s.
It’s time to look at how mining fleets consisting of different ASIC models are doing right now at various energy rates. Let’s call this metric Hashcost, to make it complementary to the term hashprice.
Hashcost tells how much raw cost a mining fleet with different power efficiencies will incur in 24 hours by producing 1 PH/s of hashrate powered by different energy rates. It is a static scenario analysis compared to hashprice, which is dynamic in measuring bitcoin’s mining revenue on a daily basis.
As the table shows, mining models older than the S17 Pro generation incur negative gross profits at an energy rate of $0.07 per kWh because their daily Hashcosts exceed bitcoin’s current hashprice of $60 per PH/s.
The current estimation based on block intervals is that the network difficulty will go up by ~1.2% in a week. Assuming bitcoin’s hashrate stays at 270 EH/s, models like S19 Pro won’t be profitable at an energy rate of $0.07 per kWh if the bitcoin price drops below $14,000. That could result in a notable network hashrate decline.
From an operator’s perspective, some public mining companies could be hashing at close to zero – if not negative – gross margins as bitcoin trades at around their respective break-even levels.
This estimation is based on their cost of production per BTC mined in Q3, or an average of Q1 and Q2 if Q3 numbers are not yet available. We removed non-recurring factors when estimating the numbers for Mara and Riot, such as Mara's accelerated cost recognition for the early exit from its Hardin site, and Riot's power credits from the summer curtailment.
The cost of production includes only expenses directly related to mining, such as electricity and site maintenance. Keep in mind that there are also other general expenses, executive payments, and – especially – interest expenses.
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