Crypto mining is one of the main methods by which individuals can acquire cryptocurrencies like Bitcoin (BTC), as they earn rewards for confirming transactions and securing the network. However, if the price of the maiden digital asset drops significantly, it might become less profitable to mine it.
According to Frank Holmes, CEO of investment firm U.S. Global Investors, the threshold price below which Bitcoin miners could halt their operations is $12,000, as this is the break-even when they become unprofitable, he said in an interview with the finance media outlet Benzinga streamed on October 19.
Machines stop at $12,000?
Holmes, who earlier this year projected that Bitcoin could outperform gold thanks to millennials’ involvement, challenging the precious metal’s status as a store of value, opined that:
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“Globally, right now it’s basically implied that you’re going to have to have like $12k, everyone starts shutting down, the average person starts shutting down [their mining machines].”
Meanwhile, the flagship digital asset’s price at press time stood at $19,139, recording a drop of 0.45% over the past 24 hours, but an increase of 0.65% over the week, according to CoinMarketCap data.
Future of Bitcoin mining
Although Bitcoin’s bulls and bears have been battling for momentum while the asset has been struggling to reach the psychological level of $20,000, its miners have remained unconcerned, as evidenced by the mining hash rate reaching a new all-time high (ATH) in early October.
However, if the darkest predictions come true, it could spell disaster for crypto miners, especially in light of the European Union proposing a new law that seeks to establish energy efficiency labels for assets like Bitcoin as part of containing energy consumption in the sector.
Interestingly, a quarterly study has found that Bitcoin mining only consumes 0.16% of global energy production, as well as accounts for 0.1% of the world’s CO2 production, despite critics focusing on its negative impact on the environment, as Finbold reported.
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