Bitcoin Mining Back to Profitability at 9,000 USD

KEY TAKEAWAY

  • With less competition (decreased hash rate) and more transaction fees, even the older models such as Antminer S9 could almost break even at 9,000 USD with USD0.042/kwh electricity costs.

Bitcoin‘s hash rate decreased significantly from 137 EH/s on May 11 right before the halving to as low as 81.6 EH/s on May 17, a 40% decline in a week, and is now hovering between 80-100 ETH/s.

Source: Bitinfocharts

Transaction fees for every block surged from the previous 0.6 BTC to 1.6 BTC, and as a result transaction fees as a % of block rewards also surged, now being over 20%.

Source: BTC.com 

Source: BTC.com

With less competition (decreased hash rate) and more transaction fees, even the older models such as Antminer S9 could almost break even at 9,000 USD with USD0.042/kwh electricity costs. Estimated costs of Bitcoin production for new Bitmain and Whatsminer models range from 5,000 USD to 7,000 USD, depending on the cost of electricity.

It is profitable for miners to hedge at the 9,000 USD price level. Thus it’s not surprising to see a stronger sell side demand in Asian markets as reported by Bitcoin OTC desks.

Previous estimate of Bitcoin mining costs with the following assumptions:

  • Total hash rate 116 EH/s
  • Block reward: 6.25 BTC; Transaction cost: 0.6 BTC
  • Residual value for each machine model @20%, with the exception of S9K @0%
  • USDCNY @7.0740
  • Each model priced at official price with the earliest available delivery. Some models are available for forward delivery only.

Source: Bybit Insight

Source: Bybit Insight

Updated estimate of Bitcoin mining costs with the following assumptions:

  • Total hash rate @95 EH/s
  • Block reward: 6.25 BTC; Transaction cost: 1.61 BTC
  • Residual value for each machine model @20%, with the exception of S9K @0%
  • USDCNY @7.1369
  • Each model priced at official price with the earliest available delivery. Some models are available for forward delivery only.

Source: Bybit Insight

Source: Bybit Insight