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After 11 years of development, Bitcoin mining has become a highly competitive industry, with about 8.96 million machines around the world working together to do one thing - mining Bitcoin. Bitcoin mining has huge electricity requirements and cooling costs, so the rise and fall of Bitcoin prices, cheap electricity costs and the cost of purchasing mining machines are key factors affecting mining costs and revenues. The dust has settled on the Bitcoin halving, the market’s panic over the epidemic and the risks brought by high leverage have been basically released, and the overall situation of digital currency is relatively clear; and the premium rate of mainstream mining machines has not been high in the past four months. It can be said that now is a good time to participate in mining. 1. Bitcoin price directly affects computing power The price of Bitcoin continued to fall at the beginning of the year, hitting a low of $3,150 on March 12, which directly hit the mining cost, and many low-computing mining machines with a computing power of 80J/T-100J/T had to shut down. In the following week, the computing power of the entire network dropped from about 124E to about 90E, a drop of nearly 27%, which is roughly equivalent to 2.34 million mining machines that are not profitable and are waiting to be started. The dark history of March 12 was a blow to highly speculative miners, but for relatively conservative miners, the plunge and reshuffle can bring excess returns; some second-hand mining machines with lower acquisition costs are "anti-fall" enough and can still maintain profits. 2. After the third halving, the price of the currency has a large room for growth Since the advent of Bitcoin, Bitcoin's block reward has been halved twice. On November 28, 2012, the first halving halved the block reward from 50 BTC to 25 BTC. Although there was no immediate price impact, within three months of the halving, the price of Bitcoin rose by more than 174%, and later rose by more than 9,100%, reaching the cycle high in December 2013, breaking through the major $1,000 mark. On July 10, 2016 , the Bitcoin block reward was halved again from 25 BTC to 12.5 BTC. In the following year, the BTC price soared all the way, breaking through many barriers and finally reaching a peak level of $20,000, eventually rising by more than 2,800%, ushering in the super bull market in 2017. The third Bitcoin block reward halving was completed on May 12, 2020. After the halving, the price of Bitcoin climbed to US$12,448 on August 9, 2020, an increase of more than 30%. Some scholars still maintain a positive view on the market after this halving. Analyst PlanB pointed out: "Every time it halves, Bitcoin (stock and flow) will double and the market value will increase 10 times. This is a constant factor." Although the market still has disagreements on the highest level that BTC prices can climb to after halving, it is certain that Bitcoin will most likely repeat the historical pattern of soaring prices after halving. 3. The price of high-computing power mining machines remained flat without the expected surge After the halving, mining machine manufacturers have carried out large-scale hardware updates and launched a new round of arms race. 30% of old models are facing elimination. At present, the main mining models have been upgraded to 40J/T-60J/T mining machines. Faced with the impending drought crisis, major manufacturers have also launched more competitive 30J/T-35J/T models. From June to now, the prices of mainstream mining machines with high computing power in the entire secondary market have basically not fluctuated much: the average price of 35J/T spot models is around 180 yuan/T, and the average price of 40J/T models is around 150 yuan/T. For miners, the current price of bitcoin is in a relatively balanced cycle, with great room for appreciation. If you buy a machine now, you can expect both the machine and the currency to appreciate. If you buy bitcoin, you may have to endure the torment of a short-term decline, while mining is much more stable. 4. After the flood season, the prices of high-computing-power models will further increase. We are still in the middle and late stages of the flood season, and the electricity costs of 40J/T-50J/T models account for more than half of the total revenue of mining machines. This will rise to about 70% during the dry season next month. And this year, due to the halving of block rewards, the dry season will be even more severe. After the flood season ends, if the price of the currency remains at the current level, Antminer T15, S11, and Shenma M10 will all be eliminated, and the total network computing power is estimated to drop by about 10% to 20%. Even if the price of the currency rises, some machines will be shut down. Once these mining machines are shut down, the profit of new mining machines will be higher, so the market demand will be huge. At that time, the low-power and high-computing models in the hands of miners will not depreciate, but may even appreciate. According to the development trend, the price of Bitcoin has a large room for growth in the next six months to one year. If the price of the currency rises sharply and the payback period of the mining machine is shortened, the price of the mining machine will also rise accordingly. However, the premium of the mining machine in the entire secondary market is not high at present, which can be said to be a relatively good opportunity to participate in Bitcoin mining. Note: The network computing power in this article is calculated based on the number of machines using the 14.5T model. |
