- Bitcoin (BTC) mining costs set to rise over 80% after the May halving, a new report states.
- Incorporating assumptions into its model, researchers from TradeBlock expect the price to skyrocket to $90,000 USD following the halving.
A new halving report from TradeBlock, a crypto data research company, the price of Bitcoin (BTC) is set to skyrocket past $90K after the halving, expected to occur in mid-May this year. However, the researchers warn that a number of miners will have to shut down if the prices of BTC do not rise pat the current $10,000 resistance level as mining cost are expected to double from current costs.
Mining Costs Set to Grow Over 80%
As Bitcoin’s supply rate is cut down in half from the current value of 12.5 BTC per block to 6.25 post-May halving, mining costs will also be on the up. The report take up a number of assumptions to rightly come up with the predictions on the cost of mining post-halving.
First, TradeBlock gave a rough estimate that the block reward halving will cause an 80% spike in mining costs to $12,525 USD. The research sets an assumption that new mining equipment will come into the market making it easier to mine BTC despite reduced rewards.
The research factors in that 30% of the current miners will adopt these new mining equipment, expected to launch in March 2020 following a delay due to coronavirus epidemic. Furthermore, the research assumes the average cost of 6 cents per Kilowatts according to average U.S estimates.
Is a Miner Capitulation on the Horizon?
With the assumptions factored in, the price to mine one BTC, with an increasing hash rate looks to set in at $15,062. Once the research adjusts for the assumption on hash rate, and assume hash rate stays nearly flat from current levels then the cost to mine one bitcoin would fall to $12,525. However, one thing remains clear, the price of BTC needs to kick up to prevent a miner’s capitulation.
Well according to TradeBlock’s director of digital currency research, John Todaro, miners are the biggest determinants of the cost they may operate on if the prices do not rise accordingly. He said,
“It’s very helpful to know what the miners are thinking, what the miners are doing. There might be some miners that are profitable at those levels, but not a lot of miners are going to be operating at a loss, and they might take their rigs offline.”