Bitrabo Editorial
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.