Bitcoin would have to be between $12,525 and $15,000 for it to remain profitable after halving
The Bitcoin Halving, a factor that has long been expected to drive Bitcoin’s upward momentum, is getting closer. Quite a few cryptocurrency analysts have begun to address the specific impact of Halving. In particular, they pay much attention to miners because after Halving occurs, the block reward will be halved.
In the opinion of some analysts in the cryptocurrency market, the price of Bitcoin must be at least 50% higher than the current level to be able to maintain profits for mining companies.
Bitcoin Hashrate and effects of Bitcoin Halving 2020
Bitcoin hashrate is an indicator of the health of the network. The higher the hashrate, the harder it is for the system to be 51% vulnerable. Besides, hashrate is also used to measure the computational power of miners in creating new blocks every ten minutes. This process, as you all know, is called Bitcoin mining.
Currently, the Bitcoin network is becoming safer over time as the Bitcoin hashrate continues to record new all-time highs. As reported by Blockchain.com, Bitcoin hashrate just reached an all-time high in December 2019 at 111 EH/s, corresponding to a rise of 170.73% from January 1, 2019.
However, to keep up with the growth rate of the hashrate, resources reserved for the mining process must also grow accordingly. Since then, the increase in cost and exploitation efficiency. Also, in less than 100 days, Bitcoin will undergo a third Halving. After Halving, the miner reward received by miners will be cut from the current 12.5 BTC to 6.25 BTC.
Bitcoin Halving is causing the community to ask an extremely legitimate question. How is that going to change the price of Bitcoin if miners want to maintain profits to be able to continue operating on the BTC network?
Will the Bitcoin price increase to $ 15,000?
Why is that such a legitimate question? Because once the cost of mining increases but the block reward decreases, the price of Bitcoin is forced to increase to offset the loss between expenditure and revenue. Some experts have concluded that the price of Bitcoin will have to range from $ 12,525 to $ 15,000 to maintain current profits.
The difference of about $ 2,500 comes from the hahsrate factor. Because there is still not enough basis for determining the development of hashrate, for example, if the Bitcoin hashrate is almost unchanged from the current price, the cost to mine a Bitcoin will drop to $ 12,500. If Bitcoin hashrate increased in the next three months as it has been in the past three months, this number would increase to about 136,000,000 TH/s. In this case, the price of Bitcoin was forced to rise above $ 15,000 to maintain profitability for the miners.
Bitcoin price before and after Halving | Source: tradeblock.com
Besides, you should also pay attention to the current breakeven cost of the largest cryptocurrency in this market. With the hashrate at around 112 EH/s and the block reward of 12.5 BTC, the report shows the price of $ 6,851. Therefore, with the current Bitcoin price of $ 9,700, Bitcoin is still bringing ordinary profits to miners operating the network.
However, it is worth noting that electricity costs vary among countries. And so does the scale of operation. This is also one of the factors that need to be considered carefully. And it is not easy to give an exact breakeven cost, specifically during Bitcoin cryptocurrency mining.
Disclaimer: This is not trading advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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