The profitability of Bitcoin mining directly depends on the total power involved, the complexity of mining and the price of the coin. On January 15, the hashrate of the network updated the historical maximum, reaching 231.2 EH/s.
Due to the increase in power, the expected increase in complexity has increased.
If at the beginning of last week growth of 0.7% was predicted, now it is expected to increase by 6.1%. In this case, after about four days, the difficulty will also update the historical maximum.
The complexity is growing both from the increase in the number of miners, and because of the improvement of asics. In November 2021, Bitmain introduced a new Antminer S19 XP model, demonstrating 140 terahesh of power with the same 3 kW of power consumption. This gives an increase in energy efficiency by 37% and profitability by 25% against the S19 pro model due to the use of 5 nm chips. According to the estimates of the analytical agency Luxor, by the end of 2022, a quarter of the global hashrate will be provided by S19 XP.
To date, the largest order for a new model in Bitmain has been placed by Marathon Digital (NASDAQ:MARA), which plans to become the largest publicly traded mining company in the world in a year. The number of available ASICs during this time should grow to 199 thousand, and the total computing power – up to 23 EH/ s.
The current cost of Bitcoin is estimated at $34 thousand, and the profitability of mining is 25.6%. Future complication will lead to a decrease in the profitability of production. As a rule, after its fall to zero and below, a Bitcoin rally follows.
The lower the mining premium, the more coins miners accumulate in anticipation of subsequent growth. Now their reserve exceeds 1.9 million BTC or 10% of the total issue of coins. In addition, not only miners, but also hodlers have returned to accumulation.
The upcoming increase in complexity, all other things being equal, will cause Bitcoin to become more expensive in the long term, since the accumulation of coins will lead to a reduction in supply on the market.