11 Oct 2021

Never ending super-profits for bitcoin miners

The increasing bitcoin price coupled with a stagnating hashrate has made 2021 a very lucrative year for bitcoin miners.
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Source: Hashrateindex, Tradingview
Bitcoin mining has been highly profitable during the whole year. The bitcoin price has increased by 92%, while the hashrate is at the same level as it was last year. Why hasn’t the hashrate followed the bitcoin price? Firstly, the network lost 50% of its hashrate in the early summer when China banned mining. Secondly, hashrate lags bitcoin price increases since it takes time to manufacture and deliver new ASICs. We have estimated the cash flow of mining 1 bitcoin for two different ASIC models; Antminer S9 and S19. These are two of the most popular ASIC models. S9 demands more electricity to mine the same amount of bitcoin than its big brother S19. We see in the chart how profitable bitcoin mining has been this year, and the profitability has significantly increased during the first days of October. The 29% increase in the bitcoin price in October has increased mining profitability by 34% for S19 models and 53% for the S9. It’s essential to keep in mind that these calculations don’t consider all the costs of bitcoin mining, only the operational. Although most of a bitcoin miner’s costs are related to electricity, ASICs are expensive machines, and capital expenditures also play a big part.
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