Tom Lee Reports Bitcoin Mining Now Less Profitable

A recent report by Fundstrat’s Tom Lee notes that Bitcoin (BTC) mining earnings are currently almost breaking even, as the activity has temporarily become less profitable the midst of the current decline in the markets, CNBC reported yesterday, March 15. Lee notes in the report that the current figure for the cost of mining one bitcoin is $8,038, while BTC is trading at around $8,221 by press time, down a quarter of a percent over a 24 hour period, according to data from CoinMarketCap.

The model Fundstrat used for calculating the cost of mining one BTC includes the cost of equipment, overhead such as sustaining cooling apparatuses, and the cost of electricity, assumed to be 6 cents per kilowatt. The head of quantitative data science at Fundstrat, Sam Doctor, said that the cost of replacing equipment takes up more than half of the overall cost of mining. Crypto miners also earn money from transaction fees, which have recently been falling. According to data from BitInfoCharts, the median transaction fee on March 15 was around $0.21, while it had been over $34 dollars on Dec. 23 of last year. Charlie Hayter, CEO of website CryptoCompare, told CNBC that miners are now earning half of what they were in December also due to a rise in popularity of BTC mining, measured by hashrate.

Reference: https://cointelegraph.com/news/fundstrats-tom-lee-reports-bitcoin-mining-now-less-profitable-due-to-falling-btc-prices

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