BTC miners' breakeven needs higher market valuation
To maintain current mining levels, the Bitcoin (BTC) market price must be between $ 14,000 and $ 15,000. Miners' current balance of payments is between $ 3,500 and $ 7,000, depending on the cost of electricity. However, the Bitcoin network is still highly competitive, with recent mining activity levels reaching 12.5 billion hashes per second.
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Mining competition is fierce. Even if the BTC price is close to $ 10,000, the balance of mining profit and loss is also a problem. Even the latest and most powerful S17 miner cannot break even at these prices. Interestingly, even though most miners are not profitable, miners are still struggling to keep up.
Low electricity costs and established mines may continue to boost mining activities before halving. On some days, the Bitcoin network generated up to 1,950 BTC per day, instead of the scheduled 1,800 BTC. This means that the halving will arrive a few days earlier than expected, while also making mining more difficult.
Chinese Bitcoin mining pool dominates
Currently, China's Bitcoin mining pools and mines produce more than 50% of blocks. This share has remained the same, but so far these miners have not colluded to attack or restructure the network. However, after halving, the significant SHA-256 hashing capability will have to find its new source of rewards to break even. Transaction fees are far from sufficient to boost the mining economy, as transaction fees account for only about $ 200,000 in revenue per day.
Possible scenarios include the expected development of BTC prices to rise above $ 14,000, a record high. This time means that for most miners, production blocks are still feasible. But it is possible that BTC prices remain low and miners are trying to mine other SHA-256 networks. At this point, Bitcoin Cash and Bitcoin SV may be acceptable. Although most miners currently work below the break-even point, they still selflessly support the Bitcoin network.
The worst-case scenario would be the surrender of miners, with a particularly small impact on mining operations. Last summer, Litecoin (LTC) halved and its hashrate plummeted, which made people understand what happened when the production block no longer had high profits-the Litecoin network slowed significantly.
Taking Bitcoin as an example, China's mining industry is likely to be more influential as they manage to break even and continue working when other miners die.