Experts forecast a decline in mining profitability

Bitcoin mining remains profitable for now, but its profitability is under pressure from the decline in cryptocurrency prices and the growth of the network hashrate. This was noted by Arcane Research analysts.

They noted that since the start of the year the cash flow from mining 1 BTC has been in a sideways trend. After deducting electricity costs (at a rate of $0.05 per kWh), the Antminer S19 yields about $31,000 per Bitcoin, taking into account the price of the coin at $39,000.

The most important factor for mining profitability is the price of the cryptocurrency, which has fallen from $46,000 at the start of the year to around $40,000. The network hashrate, which rose by 15% during this period, also materially affects profitability, the experts noted.

High profitability of Bitcoin mining during autumn led to a mass expansion of capacity, which will come online in the coming months. This will inevitably lead to higher hashrate, and subsequently mining difficulty, Arcane Research believes.

“As the hashrate grows, mining profitability may come under further pressure if we do not see a substantial rise in Bitcoin’s price in the near future,” the analysts said.

In their view, signs of declining profitability are indicated by a drop in demand for mining equipment. Since December, the price per 1 TH/s for the latest ASIC miners with energy efficiency above 38 W/TH has fallen by about 20% — to $80.

Arcane Research notes Marathon Digital’s stock is overvalued by the market on expectations of a multiple increase in the company’s hashrate.