Sunday, April 22, 2018

New analysis suggests that Bitcoin miners need a price of at least $8600 to be profitable

It is perhaps fortunate that Bitcoin has seen a resurgence in price this week because a new study done by Wall Street analysts suggests that the new cost of mining a single Bitcoin has ballooned to over $8600.

Mining bitcoin, the world's largest cryptocurrency by market capitalization, is not as profitable as once thought, according to one team of analysts on the Street who views this as a negative headwind for the price of the volatile digital asset.  
If bitcoin fails to break past $8,600 soon, analysts at Morgan Stanley expect cryptocurrency mining demand to fall significantly, weighing on component makers who have received a boost from the high-growth business amid the crypto frenzy, including Asian chipmaker Taiwan Semiconductor 
At a price of $8,507 at 4:37 p.m. UTC, BTC reflects an approximate 57% fall from highs reached near $20,000 in December, and a near 600% gain over the most recent 12 months. The digital coin's stellar run, compared to the benchmark S&P 500's 13.4% gain over a year, led many once on the sidelines to get into crypto investing due to fear of missing out on the next big thing in tech. While initial coin offerings (ICOs) in 2018 have already raked in more money than the entirety of last year, fears of heightened regulation on the red-hot cryptocurrency markets has put bitcoin's rally to a halt and drove a series of sell-offs this year. - Investopedia
Of course the cost of electricity and server farms to mine Bitcoin and other cryptocurrencies isn't the only pitfall being seen for this industry.  Accelerating taxation on local grids have even caused a few municipalities to ban mining rigs since it was causing the city to have to buy extra electricity at higher costs for their regular citizens.

Ironically, the future of cryptocurrencies do not appear to be tied to the need to mine said cryptos since most incoming ICO's simply sell a set amount of their tokens during their initial offering and then later increase the supply at future intervals.  This of course negates the perceived benefits that cryptocurrencies often promote in their ability to bypass inflationary moves, but in the end this became a fallacy when the cost of mining increased almost to the point where it is now becoming exponential.

2 comments:

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According to ripple price today it seems like RIPPLE is gonna be soon the 2nd most powerful cryptocurrency (and its not even a crypto-coin at all ...)

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