According to bitcoin mining data resources Hashrate Index and Luxor, it now costs bitcoin miners at least $17,000 to produce 1 BTC in the US, compared with $5,000-$10,000 a year ago.
price hashitcoin fell 58% in one year
Unsurprisingly, soaring electricity prices in US states have led to an increase in the cost of Bitcoin mining.
It is worth noting that from January 2022 to January 2023, commercial electricity prices in US states increased by an average of 10.71%, higher than the average increase of 6.4% in the consumer price index.
Increase price Industrial Average for January/2022-2023 | Source: EIA/Hashrate Index/Luxor
Add to that Bitcoin’s weak performance in 2022, falling from around $48,000 to below $15,000, and it’s clear that miners have been losing money due to increased operating costs and lower profits.
But that changed in the first quarter of this year, when miner hash prices (in dollars per tera-hash per second per day (TH/s/d)) rose as the price of the crypto king recovered to $30,000 31%.
Researchers at Hashrate Index noted:
“The market started the new year in a bleak way, and the lowest day in the first quarter for hash prices in dollar terms was January 1st. It went up from there, as bitcoin prices rose 70% this quarter, and hash prices followed suit. rise.”
price hashBitcoin (USD) | Source: Hash Rate Index / Luxor
boom which one is right for us For bitcoin mining?
New Mexico is the cheapest state to mine bitcoin ($16,850/bitcoin), so miners were more profitable in Q1. Hawaii, on the other hand, has the highest cost at about $114,590.
By region, the southern and midwestern U.S. states are the most attractive for miners in terms of electricity.
Energy cost to produce 1 BTC in US states | Source: EIA/ Hash Rate Index / Luxor
Recently, several U.S. states, including Arkansas, Montana, Missouri, Mississippi, and others, have taken specific steps to protect miners from overly restrictive regulations and taxes. Texas, on the other hand, amended its utility and tax laws to make them more restrictive for cryptocurrency miners.
Energy deflation can boost profits excavator
In addition, the researchers predict that the profitability of Bitcoin mining will further increase based on the U.S. Energy Information Association’s (EIA) forecast of energy price deflation.
For example, the agency expects electricity demand to fall 1% in the second quarter due to increased production of renewable energy and lower natural gas prices. Natural gas prices are expected to remain below $3 through 2023 from an average of $6.45 in 2022.
U.S. Wholesale Electricity Price Forecast | Source: Hash Rate Index/Luxor/EIA
mining stocks eliminateshiny bitcoin
Lower operating costs could help cash-strapped bitcoin miners survive in 2023. Shares of bankrupt bitcoin mining firm Core Science, for example, are up more than 450% year-to-date.
Likewise, the HI Cryptocurrency Mining Stock Index is up more than 100% this year, signaling a return of investor interest in mining stocks.
Mining Stock Performance eliminateBitcoin in 2023 | Source: Hash Rate Index/Luxor/EIA
Hash rate index researchers noted:
“If BTC prices rise 40% this year to $42,000, most mining stocks will be up more than 50% from current levels, while 4 to 5 will be up more than 150%.”.
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Ming Ying
As reported by Cointelegraph
