Bitcoin (BTC) mining is the backbone of the BTC ecosystem and miners’ returns also provide insight into BTC’s price movements and the health of the wider crypto sector.

It is well-documented that Bitcoin miners are struggling in the current bear market. Blockstream, a leading Bitcoin miner recently raised funds at a 70% discount.

Current mining activity shares similarities to historic BTC bear markets with a few caveats.

Let’s explore what this means for the current Bitcoin cycle.

Analysis shows that based on previous cycles the bear market may continue

Bitcoin mining profitability can be measured by taking the miner’s revenue per kilowatt hour (kWh). According to Jaran Mellerud, a Bitcoin analyst for Hashrate Index, a BTC mining bear market has a sustained period of revenue per kWh of less than $0.25. Under his assumption, he calculates using the most efficient Bitcoin mining machine on the market.

The 2018 bear market lasted nearly a year, sending kWh to a bottom of $0.12. Following the downtrend, a short bull market commenced until the 2019 bear market began.

According to Mellerud, the 2019 bear market produced all-time low revenue per kWh of $0.083 and lasted 463 days, while Bitcoin price dropped to $5,000.

The most recent mining bear market started in April 2022 according to Mellerud’s analysis of revenue per kWh. As of Dec. 8, the current bear market has lasted for 225 days with a minimum revenue of $0.108 per kWh. The number is higher than in previous bear cycles due to high energy prices.

Bitcoin mining historical revenue per kWh. Source: Hashrate…

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