Bitcoin Mining Faces Challenges: Is It Still Worthy?

Challenges across the Bitcoin mining industry are soaring. With network difficulty at an all-time high of . trillion and BTC’s price struggling near $,, miners are finding it difficult to maintain elevated profit levels.

Bitcoin has a total supply cap of million. The circulating supply of the world’s largest crypto asset crossed million BTC recently, which means that only million coins are left to be mined in the next years. A major battle is going through Bitcoin’s scarcity and its mining rewards.

So, with growing challenges, an important question emerges, is it still profitable to mine Bitcoin? Yes, it is, but the volume of profit has been declining sharply over the last few months. In the next few years, it will be extremely difficult for small Bitcoin miners to remain profitable. However, large mining companies will remain in the game for the next few decades.

Finance Magnates had the opportunity to interview some of the leading names in the crypto ecosystem to have their views on rising difficulties in the Bitcoin mining sector. According to them, global electricity prices and technology-driven solutions will shape the future of BTC mining.

“It’s no spoiler alert that as the network’s mining difficulty also known as the hash rate rises, mining transaction goes down. Let’s talk numbers: many resources show that the collective earnings on the Bitcoin network are around $ million a day, decreased from the average of $ million we’ve witnessed at the end of last year, a result of the hash rate uptrend,” Farah Mourad, the Senior Market Analyst at XTB MENA, said.

According to Farah, the recent downtrend in the price of Bitcoin is also hurting the operating margins and crypto holdings of miners. Since reaching an all-time high of $, in November, Bitcoin has lost nearly % of its value.

“The price plays a significant role for miners and seeing a recovery in the king of crypto that would push it back to its highs would have a major positive impact on profitability. For those mining Bitcoin at home, we don’t believe it will ever be as profitable. But, the crypto world is expanding and other projects on the rise could be a better alternative for home miners,” she explained.

Last year, China imposed a ban on crypto mining activities, and BTC’s hash rate dipped by more than % within a few weeks. The mining rate recovered quickly after the relocation of large mining companies and reached an all-time high of over EHs in . Currently, the mining rate is hovering near EHs.

Marc P. Bernegger, the Co-Founder of the Crypto Fund AltAlpha Digital, believes that innovation in Bitcoin mining will boost the sector in the coming years.

It s fascinating to see how quickly the crypto mining industry adapts to changes like the mining ban in China or ESG requirements. In my opinion, the crypto mining industry is very innovative and fast-moving and still the foundation of the whole crypto economy. Personally, I like to see how emerging mining locations like Paraguay are evolving in this very competitive market.

Many global mining companies are still trying to find locations with lower electricity prices to keep up with rising profit levels. Despite a drop in block rewards, miners have found different ways to remain in profit.

“For mining, the lower the electricity price, the higher the profits; generally, the electricity price ranges between % and % of the value of miners’ rewards. The profitability peaked around for miners and has since dropped by about %, however, in profits were outstandingly high,” Johnny McCamley, the Founder and CEO of CryptoClear, said.

Commenting on the YoY mining revenues, McCamley said: “In , the miners’ earnings decreased to . per day, however, due to the increasing price of BTC coin, this averaged out at $ a day. In , we are looking at . BTC for miners per day. That’s around $ per day based on a BTC price of $k. We hope the profitability of mining will continue for years to come.”

Challenges across the Bitcoin mining industry are soaring. With network difficulty at an all-time high of . trillion and BTC’s price struggling near $,, miners are finding it difficult to maintain elevated profit levels.

Bitcoin has a total supply cap of million. The circulating supply of the world’s largest crypto asset crossed million BTC recently, which means that only million coins are left to be mined in the next years. A major battle is going through Bitcoin’s scarcity and its mining rewards.

So, with growing challenges, an important question emerges, is it still profitable to mine Bitcoin? Yes, it is, but the volume of profit has been declining sharply over the last few months. In the next few years, it will be extremely difficult for small Bitcoin miners to remain profitable. However, large mining companies will remain in the game for the next few decades.

Finance Magnates had the opportunity to interview some of the leading names in the crypto ecosystem to have their views on rising difficulties in the Bitcoin mining sector. According to them, global electricity prices and technology-driven solutions will shape the future of BTC mining.

“It’s no spoiler alert that as the network’s mining difficulty also known as the hash rate rises, mining transaction goes down. Let’s talk numbers: many resources show that the collective earnings on the Bitcoin network are around $ million a day, decreased from the average of $ million we’ve witnessed at the end of last year, a result of the hash rate uptrend,” Farah Mourad, the Senior Market Analyst at XTB MENA, said.

According to Farah, the recent downtrend in the price of Bitcoin is also hurting the operating margins and crypto holdings of miners. Since reaching an all-time high of $, in November, Bitcoin has lost nearly % of its value.

“The price plays a significant role for miners and seeing a recovery in the king of crypto that would push it back to its highs would have a major positive impact on profitability. For those mining Bitcoin at home, we don’t believe it will ever be as profitable. But, the crypto world is expanding and other projects on the rise could be a better alternative for home miners,” she explained.

Last year, China imposed a ban on crypto mining activities, and BTC’s hash rate dipped by more than % within a few weeks. The mining rate recovered quickly after the relocation of large mining companies and reached an all-time high of over EHs in . Currently, the mining rate is hovering near EHs.

Marc P. Bernegger, the Co-Founder of the Crypto Fund AltAlpha Digital, believes that innovation in Bitcoin mining will boost the sector in the coming years.

It s fascinating to see how quickly the crypto mining industry adapts to changes like the mining ban in China or ESG requirements. In my opinion, the crypto mining industry is very innovative and fast-moving and still the foundation of the whole crypto economy. Personally, I like to see how emerging mining locations like Paraguay are evolving in this very competitive market.

Many global mining companies are still trying to find locations with lower electricity prices to keep up with rising profit levels. Despite a drop in block rewards, miners have found different ways to remain in profit.

“For mining, the lower the electricity price, the higher the profits; generally, the electricity price ranges between % and % of the value of miners’ rewards. The profitability peaked around for miners and has since dropped by about %, however, in profits were outstandingly high,” Johnny McCamley, the Founder and CEO of CryptoClear, said.

Commenting on the YoY mining revenues, McCamley said: “In , the miners’ earnings decreased to . per day, however, due to the increasing price of BTC coin, this averaged out at $ a day. In , we are looking at . BTC for miners per day. That’s around $ per day based on a BTC price of $k. We hope the profitability of mining will continue for years to come.”