Monday Mining Metrics: Howard Lutnick Praises Bitcoin Miners
7% Negative Difficulty Adjustment Mining difficulty is projected to decrease by ~7% in the coming days. This will be the largest negative difficulty adjustment since December of 2022 during the post-FTX miner capitulation. This will provide a nice boost to miner economics, especially when coupled with the recent uptick in the Bitcoin price. There’s two likely catalysts for the drop in difficulty:
Average Miner Breakeven Cost Two weeks ago we took a look at the ‘Average Miner Breakeven’ Cost and mentioned that it may be indicating a local bottom for the Bitcoin price. Since then, BTC has risen more than 20% off its low of ~$75,000. The accuracy of this metric makes sense in a rational economic world: an asset is not going to trade for less than its cost of production. I’ve circled in red each prior instance in which the Bitcoin price intersected with the average cost of production – all of these intersections were followed by the Bitcoin price making a significant move higher. I expect this time to be no different – Bitcoin is going to make a move up before the end of Q2. This metric is calculated using the average electricity rate of public & private miners as well as a blended average energy efficiency of various ASIC models.
Miner Breakeven Price by Machine Type The chart above aggregates the cost of production across all miner types to come up with a singular industry average, but not all miners are made equal. The cost of production varies depending on electricity rate and machine type. In the chart below we break down the ‘cost of production’ for various machine types based on an electricity rate of $0.078/kWh. All 3 variations the ‘Antminer S21’ have a breakeven price of $60,000 or less.
US Secretary of Commerce on Bitcoin Mining In a recent interview with Bitcoin Magazine, Howard Lutnik had high praise for Bitcoin Mining in the United States. Lutnik cites the ingenuity of miners when it comes to accessing low-cost power – utilizing a variety of energy sources, from hydro to natural gas, and more. Check out the clip here: https://x.com/BlockwareTeam/status/1916897675477189030
Live Webinar – Learn More About Mining with Blockware Join us this Wednesday at 1pm EST for a live discussion on Bitcoin Mining! We’ll be answering all of your questions about Blockware, Mining, the current state of the Bitcoin market, and more! We’ll also be announcing the winner of our survey raffle (A Free Antminer S19 XP)! Join us for an hour of valuable insights!
Sign up here: mining.blockwaresolutions.com/webinar
Blockware’s Mining-as-a-Service enables you to start mining Bitcoin, without lifting a finger. Blockware handles everything, from securing the miners, to sourcing low-cost power, to configuring the mining pool – they do it all. With multiple data centers across the US, Blockware is the most reliable mining partner in the industry. Click here to check out our Marketplace where you can see real-time analytics on our miners, and make an immediate purchase using BTC or fiat. If you’d like a more hands-on mining experience, fill out this form on our website. One of our Account Executives will be in touch and they can walk you through our entire product and service offerings! The table below provides a full pricing list for all the ASICs available through Blockware at this time. For those seeking to purchase ASICs in bulk (with or without hosting), contact sales@blockwaresolutions.com or reach out here.
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