Bitcoin (BTC) Mining Finally Profitable Again: Can The Trend Hold?
After the dreadful lows this year, Bitcoin mining is finally starting to look profitable again.
Bitcoin appears to be breaking away from the bear market it experienced through most of 2018 and a good portion of this year. Among those hurt the most were mining facilities, which found themselves in a situation where they had to shut down a significant portion of their operations and even sell some of their equipment by the kilogram.
November marked the peak of this period, with hashrates dropping significantly as it was no longer feasible for many to justify the cost of electricity for the meager returns they were getting. This, coupled with the added maintenance required for the ASICs powering these mining centers, made the entire market experience a downturn.
Since the beginning of 2019, however, it seems that many miners were coming back online, hopeful that profitability will return once Bitcoin breaks from its bear trend.
Economist Alex Krüger put it succinctly in his tweet on Saturday: The price of Bitcoin needed for mining operations to break even minimally is $3,550.
Of course, this depends on the price of energy. However, it appears that the mining market is experiencing another gold rush as Bitcoin’s price began to settle above the $5,000 level around the beginning of this month.
This can also be proven by looking at Bitcoin’s mining difficulty, which has increased to around 6.4T, a level it hasn’t seen for about five months.
Andreas Antonopoulos, a long-time Bitcoin advocate, said during a Q&A at the end of last year that although Bitcoin can theoretically lose all its value if all its miners leave the market, such a prospect is highly unlikely due to their “long-term perspective.”
“Part of the reason that’s unlikely to happen is that miners have a much more long-term perspective, meaning that they have existing investments in equipment and they usually purchase electricity on long-term plans; they don’t pay it by the week. And therefore, if they have to wait to become profitable another three months and they have the equipment in place, they’re not turning it off,” he said.
Although it’s almost certain that the Bitcoin market isn’t dying, it’s hard to say with any confidence how the market will look like over the next few months. After all, mainstream adoption of cryptocurrencies is still lacking and new solutions that could spur it are still in their early phases.