Over the past few days, Bitcoin has suffered a sharp drop in price which drags down the rest of the cryptocurrencies and tokens. Not only is the price of the said cryptocurrency dropping, but also the profitability of the bitcoin mining. Currently, according to the Braiins Hashrate Index, for every terahash of power in the Bitcoin network, approximately $0.14 net is obtained.
Although there is a drop in profitability, the mining power of the network has not been affected. In addition, the power of the Bitcoin network has exceeded that which existed before the sharp drop in the summer of 2021. Recall that then China banned mining due to its high energy consumption and Bitcoin mining farms have moved, hence the decline in network power. .
Bitcoin mining profitability plummets
The decline in profitability is closely related to the price of this cryptocurrency. Recently, it has lost a good chunk of its price, dropping from $40,000 to hover around $30,000.
The current average net price for each terahash of mining energy, as mentioned, is $0.14. This figure had not been recorded since December 13, 2020, when it reached $0.13.
This drop in profitability coincides with a slight drop in Bitcoin mining power. Just four days ago, the power of the Bitcoin network recorded 231 EH/s, its all-time high. Currently, the power is 218 PE/s, which represents a decrease of about 5%.
Despite these two data, there is no reason to think that what happened in the summer of 2020 can be repeated in the negative. It is unlikely that there will be a massive disconnection of equipment.
Although profitability is now low, the normal thing for large mining operations is not to sell immediately, but to hoard and sell what is just for current expenses. The bitcoin price will rise again sooner rather than later, so the profitability which is currently low will be higher in the future.
A very relative value
Keep in mind, however, that the profitability of Bitcoin mining is very relative. It depends on many factors, such as the equipment used for mining and the cost of electricity. This also strongly influences whether the energy consumed comes from fully or partially renewable energy sources.
Since there is electricity in Europe, even with solar panels, it is not profitable to get involved in Bitcoin mining. It is already quite expensive and adjusted in profitability to mine Ethereum.
Most of the mining farms that left China went to the United States, because there are a lot of hydroelectric plants. Some have moved to other areas with low-cost electricity. Normally, the price of energy takes priority when setting up a large Bitcoin mining farm, as well as the stability of supply.
