Electricity costs for Bitcoin mining exceed Bitcoin prices in the first half of 2023: An analysis of the exploration companies reveals increasing efficiency

Electricity costs for Bitcoin mining exceed Bitcoin prices in the first half of 2023: An analysis of the exploration companies reveals increasing efficiency

Bitcoin mining recorded an increase in costs for the provision of equipment, as can be seen from current data. According to an analysis of the nine leading Bitcoin mining companies, their average offer of offer increased by more than 9 %. Bitcoin mining was more than three times more efficient than the oil industry during this period.

The differences in the performance of Bitcoin mining and the performance of Bitcoin can be explained by the so-called lever beta influence. This indicator shows how the costs affect profitability. In the case of highly indebted beta-bitcoin mining companies, profitability tends to rise with increasing Bitcoin prices. However, if the costs for Bitcoin decrease, the profitability of the mining deteriorates

Before the planned halving of Bitcoin in 2024, many miners bought and installed additional equipment. However, this growth indicates that the maximum stalls that have been reached in booming markets may no longer be reached. Nevertheless, many mining companies have expanded their activities to ensure the long-term profitability of mining. The overall situation in Bitcoin mining has increased, with the hash rates have risen and the costs rose and have reached a maximum of over $ 31,000 by the end of June 2023.

However, the records in the blockchain show that Miners have sold a considerable amount of their stocks, which could indicate an upcoming slump in the market. Messari data show that companies that are connected to mining pools have reduced their stocks in recent months. Data from Glassnode also indicate that Miner exchanged a considerable amount of mining participations for swaps, which exceeds the observed amount during the booming market in 2021.

The price of Bitcoin is currently over $ 31,300. Although the upward trend is positive, the situation is still unstable and the prices could fall due to the increasing regulation by authorities in the USA, especially in terms of stock exchanges such as Binance and Coinbase. The US Verwaffle and Börsen supervisory authority (SEC) has also stopped the plans for a Bitcoin Spot ETF, even though companies like Blackrock have submitted their applications again.

Despite the cost increases and uncertainty, Bitcoin mining remains an important industry with a prospect of future growth. The development of the Bitcoin industry is closely related to the Bitcoin course and the regulatory measures. Investors and mining companies should follow the developments carefully to make sound decisions.