How much does it cost to mine one BTC? The famous investment bank, JPMorgan, estimated that the cost of mining a single bitcoin has fallen from $24,000 at the beginning of June 2022 to just $13,000 at the moment.
How much does it cost to mine one BTC?
The cost of producing a bitcoin is an estimate of the average cost of mining one bitcoin per day. This cost mainly depends on the electricity costs miners incur to operate their machines, but there are other variables.
As long as the bitcoin price remains above this cost, mining remains profitable, and many market observers note that production costs can also be “the bottom of the bitcoin price range in a bear market.”
According to the New York-based bank, BTC could reach $13,000, down 45% from today’s prices.
Reflection of the decline in Bitcoin mining on the price of the digital currency BTC
“While it obviously helps miners’ profitability and potentially reduces pressures on miners to sell their bitcoin holdings to increase liquidity or reduce leverage, the lower cost of bitcoin mining may be viewed as negative for future bitcoin price expectations.”
They based their estimates mainly on the decline in electricity use, as miners deploy more energy-efficient mining rigs. However, other metrics paint a slightly different picture of the leading cryptocurrency.
According to data from MacroMicro, for example, the production cost still hovers around just over $17,700. When mining costs are below the market value of Bitcoin, more miners will join. The data provider website explained that when the costs of bitcoin mining are higher than the miner’s revenue, the number of miners will decrease.
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Factors Affecting the Cost of Bitcoin Mining
Both entities calculate the cost of producing BTC. Using CBECI Electricity Consumption Index data. However, the data provided by CBECI is based on average electricity costs for miners, which can skew widely and affect the calculations.
Other costs can vary as well, including infrastructure, hardware, and personnel to maintain mining farms.
“Production costs vary widely based on the type of equipment and energy cost, but also on labor and facility maintenance costs,” said Zach Bradford, CEO of bitcoin mining firm CleanSpark .
Bradford added that his team’s analysis puts production costs even lower than that of JPMorgan.
“With the majority of public miners running the latest generation of mining rigs,” he said. And with strategic energy management contracts in place, our internal research brings the figure closer to $12,000 for general miners.” But even within a company, it will vary by facility. CleanSpark, for example, has fewer utilities.
This means that as long as Bitcoin stays above $12,000, public miners will remain profitable.