[2018-04-19] Bitcoin 'miners' are losing money at any price below $8,600: MS

[Karartma1]

"We estimate the break-even point for big mining pools should be US$8,600, even if we assume a very low electricity cost (US$0.03 kW/h)," Equity Analyst Charlie Chan and his team said in a Thursday note.
"Therefore, we think the Bitcoin mining hardware demand and price will decline further and affect TSMC's wafer demand," the report said.
But the Morgan Stanley model estimates companies that sell the specialized mining chips would break even over two years if bitcoin traded near $5,000.
Read more  https://www.cnbc.com/2018/04/19/bitcoin-miners-are-losing-money-at-any-price-below-8600-morgan-stanley.html

[richardsNY]

Biggest nonsense ever. They can't look in the contracts settled between the miners demanding a guaranteed amount of power, and the supplier gladly providing them the power they need. As always, the more of something you buy, especially so if it's a consistent demand, then the prices will be even more shockingly low than people here can imagine. On top of that, larger farms need significantly less time to generate coins than is the case for smaller pools. Different circumstances, different variables, different contract prices, etc. In easy terms, one miner doesn't end up paying what the other does. On top of that, the difficulty keeps pumping as always -- last adjustment was +9.35% and currently the estimated next adjustment signals nearly +9%.

[Qartersa]

How are these people able to see through the agreements between miners and investors in need of Bitcoin? I do not think this write up is accurate unless of course they spoke for themselves because miners are one of those Bitcoin users who really earn huge bucks notwithstanding the price decline because they get a huge cut from every mining work they accept. In fact, based on my experience, they get a specified/determined cut irrespective of how much the Bitcoin is priced at the moment. Hence, I do not think they are losing money even if electricity costs decrease because it is the only constant facility they need to make good their business. (I intentionally did not include the software here because they change once in a while.)

[odolvlobo]

I was initially surprised by this article, but I have found that the cost of the equipment is now a major factor. The difficulty is so high now that an S9, which costs over $1000, hardly mines anything any more.

[Karartma1]

I was surprised by this article, but I have found that the cost of the equipment is now a major factor. The difficulty is so high now that an S9, which costs over $1000, hardly mines anything any more.

Yes, the hashrate is in exponential mode. I stopped my last S9 long ago (sure as hell I don't mine bitcoin cash). I wonder when and if the bitcoin mining industry will find some sort of equilibrium.

[btcton]

I was initially surprised by this article, but I have found that the cost of the equipment is now a major factor. The difficulty is so high now that an S9, which costs over $1000, hardly mines anything any more.

The cost of the hardware has always been a bery big factor ever since the beginning. One of the main problems of mining Bitcoin is how volatile the price is, which chanhes your ROI time significantly while not having absolutely any control over whether you actually profit or not. It has always been just a gamble since your fate is in other people's hands.

While the exchange rate has been going down in the last couple of months, I believe this has been a good thing for some parts of the market. I work with video editing on a personal, and sometimes professional level. I also like to game ocassionally. When the value of Bitcoin went down, other cryptos went down with it as well, and so did the profit from buying graphics cards to mine those cryptocurrencies. With the fall in demand, the prices started falling back to what they were before, which I personally consider a very good thing. Same thing goes for memory. I have not tried to do the math behind where the threshold is for altcoins, but it has definitely had an effect.

[Yusif]

I was initially surprised by this article, but I have found that the cost of the equipment is now a major factor. The difficulty is so high now that an S9, which costs over $1000, hardly mines anything any more.

I think the total cost of the mining is around $8000 if you consider the plant, electricity supply and miner cost.