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HomeNewsBitcoin's Plunge to $54,000 Creates "Local Bottom" Scenario as Only 5 Mining...

Bitcoin’s Plunge to $54,000 Creates “Local Bottom” Scenario as Only 5 Mining Rigs Remain Profitable

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The recent slump in Bitcoin’s price to around $54,000 has created a precarious situation for mining operators, with only five mining rigs remaining profitable for their operators. According to a graph released by mining giant F2Pool, four Antminer rigs and one Avalon rig are still profitable as long as prices remain above $53,100. However, all other miners are now incurring losses, with their operational costs exceeding the rewards they receive.

The situation is particularly dire for miners who use less efficient ASICs (Application-Specific Integrated Circuits), which operate at a loss at a rate of $0.08/kWh. This has led to a scenario where miners are selling their Bitcoin rewards to cover operational costs, which has contributed to the selling pressure on the market.

Miners have been a significant source of selling pressure in the past, with over $1 billion worth of Bitcoin sold in June alone. However, some market observers believe that the current unprofitability of miners could mark a “local bottom” for the market. Dovey Wan, partner at crypto fund Primitive Crypto, tweeted that Bitcoin miners are “an inch away from capitulation” and that the current setup is “perfect for a local bottom.”

The unprofitability of miners could lead to a reduction in selling pressure, as they are no longer incentivized to sell their Bitcoin rewards to cover operational costs. This could potentially lead to a stabilization of the market and a reversal of the recent price decline.

In conclusion, the current situation for Bitcoin miners is dire, with only a handful of rigs remaining profitable. However, the unprofitability of miners could mark a local bottom for the market, as it reduces selling pressure and creates a more stable environment for the cryptocurrency.

Source: Coindesk

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