Tradeblock Expects Bitcoin Mining Costs to Touch $12,500

According to new estimates from analytics firm Tradeblock, the cost of mining a single Bitcoin is expected to cross $12,500 after the network undergoes another halving in May.

What will happen next?

In a recent tweet, Tradeblock shared its estimates that Bitcoin’s mining cost is going to rise after the halving takes place in May. It wrote,

“In our newly released report, we estimate breakeven mining costs for #bitcoin before and after the halving. Our estimates place breakeven mining costs at ~$12,000-15,000 per $BTC for commercial operators after the halving. https://t.co/byfqI8XGH3”

The firm quoted its latest research report, which suggests that the supply of newly minted Bitcoins will be reduced by 50% in May, after which the breakeven cost for miners is expected to increase. In 2019, most commercial Bitcoin mining operations were able to get significant profits margins. However, the hash rates are now more competitive because of which an increase in Bitcoin’s mining cost is likely. This will also increase the cost of Bitcoin in the market.

Higher hash rates being report

The report suggests that network hash rates have improved consistently week after week and reaching new highs. The mining costs and efficiency gains will rise as the hash rate continues to peak. Therefore, the price of Bitcoin will have to increase if it has to provide sizeable margins to the miners. The current cost for mining Bitcoin with the existing series of Bitmain’s Antminer is around $6,800. The same will increase by 2x in May.

It also suggests that miners are increasing their resources towards the network even though the cost is expected to increase. This sends a positive signal that miners are not disheartened by the halving and expecting the price of Bitcoin to increase around halving for them to make profits on their coins. This suggests a price rise to $12,500 to $15,000 in order for the miners to start breaking even and earn a decent profit on their work.