Is Bitcoin mining still profitable?
With the low price of Bitcoin and the high energy price, producing Bitcoins, mining, is also expensive. Is that still profitable?
Producing Bitcoins, or mining, is the main source of income for mining companies. At a rate of $69,000, as in November last year, you don’t have to do the math. Definitely profitable.
Costs produce Bitcoin
But what does it actually cost to produce 1 Bitcoin. You need a lot of computing power and especially a lot of electricity. And let the latter have become much more expensive this year. Bitcoin itself, on the other hand, has become a lot cheaper.
According to JP Morgan, the cost of producing 1 Bitcoin at the beginning of June was $24,000. With a current value at the time of writing of $ 20,816, that is not interesting. But according to the same JP Morgan, the cost of producing 1 Bitcoin has now fallen to $13,000. At least that’s what they tell Bloomberg.
Electricity usage
That saves a lot of money in a short time. What’s up with that? According to the researchers at JP Morgan, the difference is entirely due to the decreased electricity consumption in the production of Bitcoin. The mining companies that have made a point of efficient platforms to produce Bitcoin can still make a profit. Not the inefficient consumers. And these have left the market en masse.
Good news! However? Well not actually. It is precisely because of this that the price of Bitcoin falls even more. Because to cover the costs, Bitcoin is sold by all mining platforms. That is bad for the price. And so it becomes more difficult to be profitable in the production of Bitcoin.
Third quarter
That’s why JP Morgan is warning about the third quarter. They expect that Bitcoin could come under further pressure in this quarter as mining companies have shut down their production and more Bitcoin is being offered by all production companies, including from reserves, to continue to pay all costs.
Nobody has a crystal ball, but we are curious whether we have already seen the lower limit or whether it has yet to be reached before this year. In any case, there are companies for whom mining up to a price of USD 13,000 remains interesting. Who knows, the costs could be lowered even further. The future will tell.
