Community post
Bitcoin Mining Economics
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This information is not meant to be price speculation, but more to explain the #economics of Bitcoin. 🥇
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The cost to mine ⛏ a Bitcoin 🥇 in #China 🇨🇳 is currently about $3,150.
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Why is this important? ❓
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Because China 🇨🇳 makes up about 60% of the total Bitcoin Mining ⛏ Power (aka Hash Rate) in the world 🌎.
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This means that if the price of Bitcoin 🥇 goes below $3,150 then the largest Bitcoin miners in the world will no longer be profitable. 📉
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At this point they would have two options.
They could turn off their mining ⛏ operation completely and wait for it to be profitable again.
They could continue to mine, but not sell the Bitcoin 🥇until they could sell it for profit (above $3,150).
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If the second scenario plays out then this means that at $3,150 a lot of the selling pressure is relieved from the market.🚱
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Let’s think... 💭
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Every 10 minutes, 12.5 new #Bitcoins are mined ⛏. In order for a mining business to run, it must sell its bitcoins 🥇to cover its cost of doing business (mainly #electricity). ⚡️
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You might expect a large portion of this constant selling pressure to be relieved at $3,150, creating a potential floor 🌄 price there.
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Replies (4)
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Thank you!
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