Bitcoin (BTC) miners are bigger than ever at current price levels, and new data shows how likely a massive mine sale is.
As the popular Twitter account @venturefounder noted on January 14, even at $ 42,000, the BTC / USD pair is trading at about 20% above the price of two miners.
Miners surrendered due to ‘worst’ Bitcoin price drop
Despite falling $ 27,000 below the all-time high, BTC is more tempting than ever for miners. The hash rate, an estimate of the total processing power used for mining, reached a record high this week.
Meanwhile, those concerned that a new fall in BTC prices could force miners to sell have received new confirmation in the form of data showing how much BTC / USD they need to trade to balance.
Referring to a BTC production cost index from Charles Edwards, CEO of Capriole Asset Manager, the founder of the project revealed that the break-even point is currently $ 34,000.
“The worst bitcoin dump ever happened because miners capitulated (December 2018, March 2020), when BTC falls below production costs, there is a risk that miners will capitulate,” he added in the comments.
“Bitcoin risked miners capitulating at $ 30,000 in May. The current cost of production is $ 34,000, which is 20% below today’s price.”
Annotated bitcoin production cost graph (screenshot). Source: @venturefounder / Twitter
Thus, there is no reason for miners to sell their assets due to profitability as well as future prospects.
In a Medium post about his index for 2019, Edwards also noted that the transaction fees charged to miners give them extra protection against spot prices below price.
Another understanding is: “Historically, the electrical costs of producing bitcoins have represented a floor in the market price of bitcoins.”
The mining industry is ignoring the movement in spot prices this year
As reported by Cointelegraph, miners are already voting for their wallets as BTC consolidates below $ 50,000.
Related: Bitcoin cycle is not over yet, miners have been in it for a long time: Fidelity report
Instead of selling, miners have accumulated more bitcoin overall this month and have lasted longer than during the rallies.
This speaks of a healthy balance and confidence in the future – fear of impending financial difficulties does not currently affect the mining sector.
Bitcoin hashrate chart. Source: Blockchain
From now on, the price of BTC will be at least $ 30,000, according to the current worst-case estimates from well-known analysts.