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Monday, August 15, 2022

Bitcoin Miners Can Resist BTC Price Hit Of 20%

The business of Bitcoin mining is currently bigger than ever at the recent price levels, and much of the new data simply shows the unlikely possibility of a sell-off. As noted by Twitter account @venturefounder on the 14th of January, even at a price of $42,000, the trading pair of BTC/USD is around 20% above the cost price of miners.

Despite going down by a full $27,000 below the all-time highs, BTC is currently even more enticing than ever for the miners, Hash rate, or the estimate of the total processing power that is dedicated to mining did reach new all-time highs this current week.

Bitcoin Miners Have No Reason For Worry 

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Those who have pretty concerned that a price dip in fresh Bitcoin could be a major signal for miners into selling have received assurances through data that has been covering exactly how much of the exchange should be trading at them for breaking even.

When referencing the production cost indicator of BTC from Charles Edwards, the CEO of asset manager Capriole, @venturefounder went on to reveal that even at the breakeven point it currently stands at around $34,000. 

He further added that the worst dumps that the cryptocurrency has ever had were due to the miners capitulating when Bitcoin fell below the costs of production- where it is at risk for miner capitulation. He went on to state that the cryptocurrency was at a much larger point of risk for miner capitulation at a price of $30k in May. The current cost of production is $34k, which is 20% below the current price. 

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As of now, there is no major reason for the Bitcoin miners to sell, largely due to the profitability- as well as future perspective- of their operations. In a post on Medium about his indicator from a couple of years, Edwards went on to note that most of the transaction fees that were awarded to miners did give them quite an additional cushion against spot price incursions.

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