Older Bitcoin (BTC) mining rigs are struggling to generate positive income during the current cryptocurrency market downturn.
75% drop in Bitcoin mining profitability
The profitability of many application-specific integrated circuit (ASIC) machines has fallen into the negative zone following Bitcoin’s plunge below $24,000 on June 13, data obtained by F2Pool shows. Among those machines are the Antminer S11 and the AvalonMiner 921, which are now close to their “breakout price.”
For your information, we publish the latest list of the Shutdown Price below which crypto mining machines in this chart will have to be shut down for lack of profitability. pic.twitter.com/qxGtLjJI9l
— Bitdeer (@BitdeerOfficial) June 13, 2022
Notably, Bitmain’s Antminer S11 offers a maximum hash rate of 20.5 Tera-hash per second (TH/s) for a power consumption of 1,530 watts.
The operating cost of a 211 Antiminer is 0.13 kilowatt hours (KW/h), based on the world average cost of electricity. As a result, it would consume about $4.5 of energy each day versus about $2 of revenue in the same period, according to data collected by ASIC Miner Value.
Similarly, Canaan’s AvalonMiner 921 costs about $5 a day to run, compared to its revenue of more than $2 in the same period.
Overall, Bitcoin miners’ earnings have gone from $0.412 per TH/s/day in October 2021 to $0.11 per TH/s/day in June 2022, according to the “Bitcoin Hashprice Index”, a decline of 75% in eight months.
The losses coincide with a sharp decline in Bitcoin’s hash rate over the past seven days, from an all-time high of 239.15 exa-hash per second (EH/s) on June 6 to 189.72 EH/s on June 13, according to data from CoinWarz.
This suggests that miners are limiting their BTC production capacity by theoretically shutting down unprofitable mining rigs; and this trend may continue in the coming weeks if Bitcoin does not rally above $25,000 and/or mining difficulty adjusts.
Bitcoin miner stocks take a hit
On June 13, the price of Bitcoin reached its lowest levels since December 2020, after a brutal crash in the cryptocurrency market.
BTC price dipped as low as $23,707 (Coinbase data) from its November 2021 high of $69,000. The losses were due to concerns about rising interest rates in the United States.
Bitcoin mining companies, which remain at the forefront of minting and supplying new BTC tokens, have borne the brunt of the price decline. For example, shares of Canaan fell by more than 90% after peaking at $39.10 per share in March 2021.
Similarly, VanEck’s Digital Assets Mining ETF (DAM), which debuted on the market in early March 2022, had lost 63% of its value as of June 10, measured from its all-time high of $46.05. It seemed poised to open on June 13 lower, according to Nasdaq data prior to the opening of the day.
New generation BTC mining equipment is still profitable
On the other hand, some conventional mining rigs are still making a profit for miners, indicating that their owners will be able to weather some of the Bitcoin bear market.
That includes the newly launched iPollo V1, which offers a daily revenue of about $62 versus its $9 energy consumption in the same period, and the Antminer S-series rigs, which generate a daily revenue of between $4.75 and $18 even though Bitcoin is below $25,000.
For your information, we publish the latest list of the Shutdown Price below which crypto mining machines in this chart will have to be shut down for lack of profitability. pic.twitter.com/qxGtLjJI9l
— Bitdeer (@BitdeerOfficial) June 13, 2022
However, some profitable rigs are close to their disconnect thresholds, including Antminer’s S17+ (73T). It could become unprofitable when the price of BTC drops to $22,000, according to data provided by Bitdeer.
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