Bitcoin price and its mining costs
As soon as bitcoin price start falling the fundamental argument which comes into discussion is its mining cost. There is an extensive debate that, would BTC price fall below its mining costs? The fundamental is that if cost of commodity or assets exceeds its selling price then there would be no gains for holder or miner of that asset.
Few points related to mining and its perception:
• Bitcoin mining costs are not same across the globe
• Cost of mining ranges from ~$2,000 to ~$6,000
• Average price is ~$3,500 +/- with approximation
• The cost of mining machines and electricity determines the cost price of BTC
• Mostly traders and investors believe that BTC would not fall below mining costs
The thought which took my attention on BTC prices of January 2017, which was around ~$1,000 and mining cost would be lower at that time, just a 1.5 years ago!!! From then prices kept rising and the asset prices which support mining also took sharp rise from then. This means assets which support mining move up with the rise in bitcoin price. This also opens the possibility of fall in price of BTC if adverse happens and same shall bring down price of the mining assets hence, the mining will be attractive at all time.
However, it is extremely unlikely that we are going back again to old prices because we have lot of good news around and investors almost doubled than we had in January 2017.
I would like to listen from you guys on mining costs and its associated logic with BTC price. Please comment and share your thoughts.
Cheers !!!
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