Report on Bitcoin [BTC] Mining Profitability is Positive – Is a Bullish Trend Forthcoming?

According to a recent update from Fundstrat, Bitcoin [BTC] mining is highly profitable even with stand-alone systems released in 2017.

Bitcoin [BTC] mining forms an integral part of the entire crypto ecosystem. The process involves expensive hardware and running cost.

The market has seen tremendous research and development in these systems. The profits vary according to the break-even cost of mining hardware. The new age miners are energy efficient and at current prices are yielding up to 100% profits.

bitcoin mining funstrat
Break-even Cost of Bitcoin Mining Hardware (Source: Tweet)

The average break-even cost of current systems is around $6300. It is consistent with the research from CoinShares reported earlier. Moreover, as they have also considered the cost of depreciation, the revenue is even more substantial.

Furthermore, the mining farms with a large number of hardware units are much more efficient than a stand-alone system.

Rising Total HashRate

The total hash rate for Bitcoin mining is also on the rise. It is continually reaching new All-Time Highs almost every week. This is an indicator of the growth of the ecosystem.

btc total hashrate

Bitcoin [BTC] Mining Total Hashrate (Source)However, as the mining hash rate is continually increasing, the difficulty for Bitcoin mining is also growing. Hence, the older rigs will eventually stop operating due to competition.

While it seems like an adverse situation, the capitulation of old miners can be a bullish signal for Bitcoin. Crypto-analyst Willy Woo developed this mining capitulation theory.

willy woo difficulty ribbon
Bitcoin Mining Difficulty Ribbon (Source: Woobull)

As the difficulty ribbon starts to decompress, more Bitcoins are left to be accumulated for the rest of the miners. He also suggested that since the old miners will hold onto their Bitcoins in all likelihood, the markets would see an interim supply in the shock, causing an increase in its price.

Furthermore, while mining forms a massive part of the supply for Bitcoin, it is controlled by math. A dip in the total hashing power or an increase would not affect the supply rate of Bitcoin; it will be readjusted soon to 10 minutes per block. The only thing affected will be mining profits.

Do you think that Bitcoin will be bullish or bearish in the short-term? Please share your views with us. 

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