Cryptocurrency After the big drop in the market, on TradingView “Bitcoin According to the “Cost of Production” index, BTC is no longer profitable for cryptocurrency miners.
According to this indicator, Bitcoin has recently fallen to the “unprofitable” price level. This has not been seen since October of 2020, when the BTC price hovered around $12,000. However, the profitability rate of Bitcoin miners is estimated to be much lower, as the electricity cost fees in the indicator on TradingView are out of date.
After the mining ban imposed by China, the mining difficulty was increased due to the sharp decline in BTC mining and the subsequent massive rise. Therefore, even when using the data in 2021 and 2020, it is observed that the profitability rate of miners is negative.
Although some investors and analysts did not expect the BTC price to drop so suddenly in such a short time, the market faced a similar situation in 2018. Market participants can expect a reduction in hash rate and mining difficulty at this stage as BTC miners can switch to other assets to end their money losses.
Bitcoin Mining Difficulty May Be Lowered Soon
With the reduction of BTC mining difficulty, there may be a gradual improvement in the cost of Bitcoin production in the market, as the electricity requirement for block production will decrease.
Even though the mining profitability rate largely affects only miners, there may be a slight reduction in selling pressure in the market as fewer coins will be produced on the network.
*Not investment advice.