Bitcoin miners can withstand a fresh 20% BTC price drop before capitulating, data shows


Bitcoin (bitcoin) At current price levels, mining is bigger than ever, and new data shows how likely a massive miner sell-off is.

as famous Posted by popular Twitter account @venturefounder on Jan. 14, even at $42,000, the BTC/USD trading pair is about 20% above miner cost.

Miners behind ‘worst’ Bitcoin price drop capitulate

Even though Bitcoin is a full $27,000 below its all-time high, Bitcoin is more attractive than ever for miners. hash rate, an estimate of the total processing capacity dedicated to mining, arrive All-time high this week.

Those worried that a new BTC price drop could force miners to sell, while gaining new reassurance through data on how much BTC/USD should trade to break even.

Venture founders refer to BTC production cost metrics from asset management firm Capriole CEO Charles Edwards, revealing that the current breakeven point is $34,000.

He added in his comments: “Bitcoin’s worst sell-off ever was due to miner capitulation (Dec 2018, March 2020), and when BTC is below production cost, it risks miner capitulation.”

“BTC is at risk of miner capitulation at $30,000 in May. The current production cost is $34,000, which is 20% lower than the current price.”

Annotated graph of Bitcoin production costs (screenshot).Source: @venturefounder/twitter

Therefore, there is no reason for miners to sell due to the profitability of their operations and future prospects.

in the media postal Regarding his 2019 metrics, Edwards also noted that transaction fees awarded to miners provide them with an additional buffer against a spot price intrusion below the cost of production.

“Historically, the cost of electricity to produce bitcoin has represented a floor for bitcoin’s market price,” wrote another insight.

Mining shrugs off spot price action this year

As Cointelegraph reported, miners are indeed voting with their wallets as BTC consolidates below $50,000.

related: Bitcoin Cycle Far From Over, Miners Are Involved For Long: Fidelity Report

Miners are not selling, but a lot of already accumulation BTC during the month and duration above the highs.

It speaks to both a healthy balance sheet and a determination for the future – worry Economic difficulties There has been no pressure on the mining industry so far.

Bitcoin hash rate chart.Source: Blockchain

Looking ahead, current worst-case estimates from prominent analysts predict BTC price floor Not less than $30,000.