BTC Prices Below $8K Could Spell Disaster for Bitcoin Miners

[Cordillerabit]

According to a study conducted by Wall Street analyst, Tom Lee’s agency, Fundstrat, BTC prices below the $8K range make it awfully difficult for miners to gain revenue. Lee details that at a global average rate of six cents per kilowatt-hour, some BTC miners are either breaking even right now or mining the cryptocurrency at a loss.

Bitcoin currently trades essentially at the break-even cost of mining a bitcoin, currently at $8,038 based on a mining model developed by our data science team.

The research model is based on a global average of six cents per kilowatt-hour. There are definitely some areas in the world such as China that offer far cheaper electric rates. China’s rates for power can be 4 cents or less per kilowatt-hour. Other regions in the world that offer cheaper methods of power production like hydropower can also offer competitive rates as well.

According to Blockchain.info charts mining revenue peaked on December 15 one day before BTC touched a global average of $19,600 USD.

The last time BTC miners suffered from break-even prices and even losses was around January 2015 when the cryptocurrency started climbing above $200 per coin. Coincidently it marked the end of the year-long 2014 bear run when BTC was named “worst currency of the year.”

Lots of miners have skin in the game now as the BTC network has exceeded 25 exahash and the average lately is usually 20. Lee’s model details that if miners see prices around $3-4K per BTC then a lot of miners will likely be forced to shut machines down

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