Bitcoin Miners: “(Bitcoin) Has Always Made Gains Over Any 4 Year Period”
Professional Bitcoin miners discuss mining and whether now is a good time to get started:
Bitcoin’s bottom might not be in, but miners say it ‘has always made gains over any 4-year period’
A critical component of BTC price that many investors often overlook is the condition and sentiment of Bitcoin miners, which is exactly why Cointelegraph had a chat with Rich Ferolo of Blockware Solutions and Will Szamosszegi of Sazmining Inc. to gain clarity on what’s happening in the mining industry and how this might impact market sentiment going forward.
Cointelegraph: Is the bottom in for Bitcoin? The price touched $17,600 nearly two weeks ago and it’s starting to feel like the fund-driven capitulation armageddon might be over. Thoughts?
Will Szamosszegi: It’s impossible to say whether or not Bitcoin has hit a bottom. In general, I recommend a dollar-cost-averaging strategy to people: Just buy however much Bitcoin you feel comfortable with on a consistent schedule. We’ve seen drawdowns even bigger than this before — such as 93.7% in its early days and 83.4% in 2018. Bitcoin has always made gains over any four-year period in its history.
CT: Currently, Bitcoin is trading below the realized price and below miners’ cost of production. The price also dipped below the previous all-time high and the hash rate is dropping. Typically on-chain analysts pinpoint these metrics hitting extreme lows as a generational purchasing opportunity, but is it?
Rich Ferolo: Blockware has done a lot of research on this and we’ve calculated the breakeven price from machines as far back as the s9 from 2016, at $.07 per kilowatt, the breakeven is $38,000 for a s9. You’re going to see older machines coming off the network eventually. For the s17s, at $.07 cents per kilowatt, BTC needs to be at around $18,000.
Newish machines are more efficient and while difficulty and the hash rate adjustment are trending down for current generation machines, anything above 90 terahashes (TH/s) can make it. Anything below 34 watts per Terahash is inefficient.
One factor to consider is that the value of machines is going down. Even if BTC price starts to go up and there’s a symbiotic relationship between price and the macro factors impacting Bitcoin price and prices throughout the wider-crypto market.