In recent days, the price of bitcoin has fallen sharply, which has led to a decrease in network hashrate by 20%. It suggests an outflow of miners due to the losses, which has happened more than once. We decided to investigate where the breakeven points of mining are located on the most popular devices, and how they correlate with the price.
One of the most famous and widespread miners in the world, ASIC S9, has the worst break-even rates: to profit from this device, the price of bitcoin must be above $7,643.
The leader in terms of profitability at the moment is Asic S17 from Bitmain. It will generate profits until the rate drops below $3,598. The second and third most profitable companies are Innosilicon T3 + 67 and Avalon 1166, the break-even point of which is $3,970 and $4,299, respectively. All of the above models are flagships for the largest mining companies in the world.
If you look closely at the bitcoin chart, you can find a clear relationship between the breakeven levels and the price of bitcoin . So, the level of $7,500 was a key for the heading cryptocurrency for 6 months, and it was at this level that Asic S9 had zero profitability.
It could be a coincidence if earlier, we had not already observed how Bitcoin walks through these levels. Just recall the situation a year ago, when Bitcoin was trading at around $ 3,200 - $ 3,500. At that time, the break-even level of the best mining devices was near $ 3,000. And as history has shown, bitcoin has not dropped below this level.
A large number of matches indicate a clear pattern. Therefore, it is worth paying attention to the following two levels: $4,00 and $4,500. It is quite possible that bitcoin will come to these very marks and, possibly, it will be that very bottom from which new explosive growth will be expected from us.
* To calculate the breakeven point, we took the average cost of energy for industrial companies from China at $ 0.075. We calculate for China because 70% of the mining power of bitcoin locates in this country.
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Hashrate always follows the price and not the other way around. Price can crash to $500 and mining would still be profitable for those that remain and most will no doubt switch off their old clunky models. The difficulty will keep adjusting downwards as more miners leave and thus mining remains profitable unless a large chunk of miners are confident enough to mine at a loss by paying their bills out of pocket and hoarding the coins.
In any case, Litecoin's dramatic reduction in hashrate by more than 50% after the recent halving pretty much proves that hashrate follows the price.
-- Satoshi nakamoto
Imagine a situation where one miner had a secret ASIC which is able to profitably mine even at $500 price point. If price falls to say $1000, all other miners will be priced out of business but that doesn't mean the Bitcoin network will grind to a halt because there is still one miner left. It will still continue to generate the same amount of coins per block and still process the same number of transactions per second that it always did because the difficulty will eventually scale down. The only problem will be network security.