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Why the price of bitcoin is about 4,000 dollars, when the cost of mining the main cryptocurrency starts from 6,000 dollars?

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We believe that Bitcoin’s pricing policy is strategically controlled by the largest miners, similar to the effect of OPEC on the oil markets, in the structure of the oligopoly market. And perhaps the recent strong decline in prices reflects the position of China’s largest mining companies.

Using relatively low mining costs, cheap wholesale energy and equipment, they mine cryptocurrency gold at virtually cost in order to achieve broader strategic goals.

Many traders and investors were shocked by the movements in the market, expecting the price of BTC to be around $ 6,000, which is considered a key price barrier due to the fact that it is a break-even price for the extraction of Bitcoin itself. However, data show that this position no longer refers to the largest mining pools. Due to several factors, the cost of production for the vast majority of the largest Chinese miners is from 3,900 to 4,400 US dollars.
From mid-2017 to mid-2018, annual extraction costs actually amounted to about $ 6,000, provided that they are fully loaded. The total cost of the unit included:

  • The cost of the ASIC components ranges from $ 3,500 to $ 5,000 (Antminer S9 units are available at a discount with a check price of $ 7,000)
  • Energy costs are $ 1,350 (usually from $ 0.06 USA to USD 0.1 per kWh)
  • The operating system of $ 900 per unit A CAPEX averages about 100 per unit.

Today, the Antminer S9 will soon be replaced by more productive ASIC equipment. Therefore, when analyzing pricing and break-even estimates, we used the price of the new Bitmain Antminer S15 and T15, which, according to expectations, will occupy the market for the next 12-18 months.

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