Bitcoin miners face profitability challenges as production costs rise

The cost of producing BTC is affecting Bitcoin miners whose machines are struggling to generate profits due to the price difficulties of the flagship cryptocurrency.

According to data platform Rework, the average cost of mining 1 single BTC in early June skyrocketed to $83,668 but decreased slightly to around $72,000 by July 2.

Bitcoin mining equipment loses its profitability

James Butterfill, head of digital research at CoinShares, shared data showing that the price of Bitcoin was hovering around the average cost of production during the April halving event.

According to the data, half of the 14 miners identified, including Bit Digital and Riot Platforms, spend above the average cost to produce BTC, while Tether-backed Bitdeer and Hut8 spend below the average.

Bitcoin Mining Production Cost. Source: X/James Butterfill

This situation was further confirmed by F2Pool, a Bitcoin mining pool operator. They indicated that only ASIC machines with an efficiency greater than 23 W/T were profitable as of July 4.

According to data from F2Pool, only six Bitcoin mining machines, including Antminer S21 Hydro, Antminer S21, and Avalon A1466I, are profitable at Bitcoin breakeven prices of $39,581, $43,292, and $48,240, respectively.

Similarly, other machines like Antminer S19 XP Hydro, Antminer S19 XP, and Whatsminer M56S++ are profitable, with Bitcoin prices exceeding $51,456, $53,187, and $54,424, respectively.

Mining difficulty plummets

However, Bitcoin mining difficulty decreased significantly on July 5, marking one of the most notable declines since the FTX collapse. F2Pool explained that this could make more machines profitable.

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