Bitcoin’s drop to $10,000 will make almost any mining operations unprofitable, creating some real dangers
Despite reports that Bitcoin mining has become unprofitable after the first cryptocurrency fell below $24,000, the all-time low for Bitcoin mining profitability remains well below $20,000.
An analyst at Blockware Solutions believes that at $10,000 BTC and the existing network difficulty, 50% of existing miners will have issues with operating profitability. The profitability of old-gen miners with the average electricity rate is already nonexistent.
Next-gen miners show some profitability because their processing power is higher, as is the volume of coins mined. The analyst estimates that 50% of existing miners will have problems operating profitably at $10,000.
Such a rapid drop in the hashrate makes the Bitcoin network less secure and potentially unstable until the mining difficulty adjusts downward, allowing the acquisition of new coins at a lower price.
Effect of decreasing hashrate
During a bear market, declining emissions are one of the main ways to determine a potential reversal point and the existing pressure in the market. In 2021, the crackdown on the Chinese cryptocurrency industry caused one of the largest and fastest hashrate declines in Bitcoin history.
Because of the decreased issuance and the continuously rising demand during last year’s bullrun, Bitcoin’s price exploded and reached almost $70,000 while struggling to maintain above $30,000.
Prior to the stabilization of mining difficulties, the network may experience stability and security issues. As of now, there are no signs of a flash crash unless some unexpected bearish news breaks through space.
