We are deep in a Bitcoin bear market and I’m starting to hear questions about how profitable Bitcoin mining is given the constantly falling price of Bitcoin.
If you’re an individual miner looking to break into crypto mining, Bitcoin mining won’t be profitable at today’s prices. If you’re trying to run a Bitcoin mining business, you’ll still be profitable at today’s prices but only if you’re reasonably good at finding cheap electricity and have efficient operations in place. And then of course, the elite miners are still making insane amounts of money. But this might not be the case forever. The hash rate of the network is growing at breakneck speed, meaning unless your operations are too, you’re getting a smaller share of the Bitcoin network rewards. Miners are getting more and more creative, finding cheaper sources of energy, and this will likely continue for the near future. I think at $3,000 per Bitcoin we’ll start seeing a squeeze on industrial miners and they’ll either move to cheaper areas or take their systems offline given current network hash rates, but if the network grows as fast as it has over the last 6 months, that breakeven point could continue to rise – possibly as high as today’s prices.
We don’t have a perfect picture of profitability for Bitcoin miners, but for now it’s safe to assume that most miners are still making healthy profits and it’s just the small population of hobbyists that are struggling, but there are lots of fast-moving variables that could change that moving forward.