Post
Topic
Board Speculation
Merits 1 from 1 user
Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
Biodom
on 16/10/2023, 04:13:38 UTC
⭐ Merited by Gachapin (1)
Approximating bitcoin price 'needed' for miners to be profitable, assuming stable electricity prices:

Currently, miners are said to have full breakeven at 23.4K/btc (including equipment amortization, 21.3K without equipment amortization).
s19 was introduced 3 years ago.
S21 is introduced now, about 3 years later.
During 2020-2023 difficulty increased about 2.86X or 42% a year (186% total).
Productivity in new miner increased from 29.5 to 17.5 J/T or 59% reducing $$ for profitability to 12.64K (with no amortization), but you need to add $7K on bitcoin miner cost amortization.
Currently, S21 will make 0.216btc/year with Zero electricity cost and 0.16 btc/year with 5c electricity, so NO more than 0.1 BTC/year after halving (before subtracting costs)
Assume the miner will make 0.216btcX(5mo/12) before halving (with no network growth)=0.09 btc (before costs).
After halving, the initial electrical cost of operation would be at least 25.2K/btc produced and more in reality, depending on the rise in difficulty.
Let's assume 25.2K initial cost and project 42% a year difficulty growth as it was in 2020-2023.
In three years (by 2026) the break even mining cost would be at least 72K.
You would also need to profit at least $7K to amortize your miner, which is currently 0.257BTC, but could be less later.
However, after halving you would only make 0.08 btc/year (start at 0.1 btc, end at 0.06btc before subtracting costs), then 0.0464 btc year two, then 0.0366 btc year three.
Therefore, assuming a fixed electricity of 5c, you would spend 1533 in years 1, 2 and 3 each, plus 7k on miner.
Total outlay about 12k (as you also pay for miner shipment)

So, you will probably produce about 0.09btc (before halving), then 0.08 btc (y1), then 0.0464 btc (y2), then 0.0366 btc (y3).
Total: 0.163 btc with 639+1533X3=$5238 in electricity cost and $7K in miner cost. Total cost: $12238
Therefore, to make money in $$, your average bitcoin selling price should be no less than $75100/btc during the next 3 year and 5 mo.
Typically, at some point in the cycle miners become VERY profitable, so at least a double of 75K is likely to be attained at some point in the next 3 years and 5 mo.

TL;DR My approximation shows a minimum average price of 75K for miners' bitcoin sell after buying a S21 to achieve a breakeven in the next 3 years and 5 mo (assuming no repairs and a fixed electricity cost at 5c).