BTC mining costs reach 10-month lows as miners use more efficient rigs

As mining hardware improves, the cost of mining Bitcoin (BTC), has fallen to ten months lows. The difficulty has also dropped 6.7% from its May peak.

Nikolaos Panigirtzoglou, JPMorgan’s strategist, told investors on July 13 that Bitcoin production costs had fallen to $13,000 from $24,000 at June’s beginning.

According to analysts, this is the lowest it’s been since September 2021. This comes as mining difficulty has fallen from its May highs at 31.25T down to 29.15T.

Lower production costs for Bitcoin can help miner profitability and ease selling pressure. Bloomberg reported that the strategists remain bearish and stated that “the decline in production cost might be perceived negatively for the Bitcoin price outlook going ahead.”

Some analysts consider the production cost to be the lower limit for BTC prices in a bear market. Many analysts predict that BTC prices will fall to $13,000 by the end of the year, which is in line with the 80%+ drawdowns experienced in the two previous bear markets. Bitcoin prices are currently down 70% from their November high.

The Bitcoin production cost reached its peak just after the price peaks of April and November 2021. It has since fallen back to market prices.

A drop in production costs has been linked with a decrease in electricity consumption.

The current Bitcoin energy consumption index from Cambridge University reports that the network’s daily power demand is 9.59 Gigawatts. This is a decrease of 33% in the last month, and 40% lower than the February 2022 peak demand of nearly 16 GW.

Source: Cambridge University

A significant number of miners also shut down older, less efficient mining rigs due to rising energy prices and a fall in BTC prices.

Asicminervalue claims that the Bitmain Antminer E9 was just released and is one of the most efficient units available. It has a maximum hashrate of 2.4Gh/s and a power consumption in excess of 1,920Watts.

Related:Bitcoin miners are selling their hodlings and ASIC prices continue to drop — What’s next?

Miners have also been affected by the double whammy that is increasing global energy prices and plummeting BTC prices. Since the start of 2019, mining profitability has declined by 63%. Bitinfocharts reported that mining profitability is at its lowest level since October 2020, at $0.095 per terahash/second.

The fall in production costs may stop a further decline in profitability, and could even reverse it in the next months.

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

Close Bitnami banner