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Break-even Level of various Miners

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
How the Breakeven Level of Mining Allows One to Determine the Pivot Point of Bitcoin

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 support area 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.

Thanks for the good thoughts
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Dec 03
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Dec 05
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Related Ideas

thank you for your work. Very interesting and helpful!
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This is the playground, imho ...



Do or die.
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Asic S9, Asic T14, Asic S17??? WTF?! The correct is Antminer S9, Antminer T14, Antminer T14... or even Bitmain S9, etc.
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cryptosrocket cryptosrocket
*Antminer T14, Antminer S17
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The "break even" point of mining has nothing to do with a bottom. Hashrate follows price, price does not follow hashrate. So If price falls, hashrate will drop and just make it cheaper to mine, thus the break even point of mining just gets cheaper and cheaper.
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nginx btcbum
@btcbum, This! I don't know why even reputed traders are pushing false narratives by saying mining profitability sets a price floor. It absolutely DOES NOT.

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.
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btcbum nginx
@nginx, I had litecoin in mind when writing it. In contrast, gold has a floor (assuming people still want gold), because it can become unprofitable for everyone to mine and production goes to 0 until price rises to a point they can start production up again. With BTC, it just keeps spitting out supply regardless of price.
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@nginx, "The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price."

-- Satoshi nakamoto
+1 Reply
@ft-73, That logic works for gold mining and oil mining but not for Bitcoin mining. That's because Bitcoin does not have any fixed cost of production. The cost depends upon hashing difficulty which in turn depends upon network hashrate. In comparison, gold mining doesn't become cheaper if most miners go out of business. Bitcoin's rate of production will remain the same irrespective of whether there is one miner or a million miners.

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.
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@btcbum, Hmm, doesnt difficulty also play into this?
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