Recent on-chain data indicates that the Bitcoin Miner Price has dropped below the BTC Electrical Cost, marking the fifth occurrence of this event.

Bitcoin Miners Experience a Drop Below Electrical Cost

In a recent post by Capriole Investments founder Charles Edwards, a significant development in the status of Bitcoin miners has been brought to light.

Two key metrics are at play here: the Electrical Cost and the Miner Price. The Electrical Cost measures the daily expenses miners face in electricity to mine 1 BTC.

The Miner Price tracks the revenue generated by 1 BTC for miners, which comprises block rewards and transaction fees.

Block rewards are paid in BTC at a consistent rate, based solely on the cryptocurrency’s price. Meanwhile, transaction fees vary based on network activity levels.

When the network is congested, high-fee transactions are prioritized due to limited capacity, ensuring quicker processing times at a higher cost.

By dividing the total transaction fees by the mined BTC amount, Edwards’ metric calculates the revenue attributed to 1 BTC, factoring in both block rewards and transaction fees.

The recent trend in Bitcoin’s Electrical Cost and Miner Price over the past decade is illustrated in the chart below:

The chart indicates that the Bitcoin Miner Price has fallen below the Electrical Cost, implying that miners are not generating adequate revenue from 1 BTC to cover mining electricity expenses.

Historically, when miners faced similar struggles, Bitcoin price experienced notable bullish momentum, a trend worth monitoring closely.

Bitcoin’s Current Price

Bitcoin recently surpassed $66,000 but has since retraced, with the price now hovering around $64,800.