Fun

Tradeblock Estimates Post-Halving Mining Cost of $12,500 per BTC

News Feed - 2020-02-16 04:02:26

Tradeblock Estimates Post-Halving Mining Cost of $12,500 per BTC


On February 7, the blockchain analytics provider Tradeblock published a report about the upcoming BTC reward halving. BTC’s block reward is expected to halve on or around May 12, 2020, and Tradeblock’s report estimates that the cost to mine BTC will be over $12,500 after the halving.


Also Read: The Controversial S2F Model Predicts Bitcoin Price Will Reach 100,000 USD Within 2 Years BTC’s Price Must Rise According to Post-Halving Cost Estimate


The great reward halving of 2020 is coming and the discussion about this topic has intrigued crypto supporters. BTC, the largest blockchain network by market capitalization, will see a reward halving on or around May 12, 2020.



This means a miner who finds a block on the network will only get 6.25 BTC, in comparison to today’s 12.5 BTC reward. Of course, the BTC reward halving has prompted intense speculation on whether the price will rise prior to the halving and remain profitable to mine after the event as well. Across social media platforms and crypto-focused forums, individuals have been debating the subject regularly. Additionally, there’s been various studies done on the subject and Tradeblock recently published the firm’s thoughts on the upcoming BTC reward halving and estimated post-halving cost. Figure 1 from Tradeblock’s report shows BTC’s network hashrate and difficulty hit new all-time highs.


The blockchain analytics provider emphasized that the post-halving cost should be around $12,525. “In our latest estimates, we projected that commercial mining operators were likely operating at healthy profit margins as the price of bitcoin increased throughout 2019 (albeit with bouts of volatility over the year),” Tradeblock’s researchers noted. “However, the network hash rate has continued on a record run, making new highs nearly each week.” They added: Hash rate increases as the number of resources, in aggregate, committed to securing the network through mining activities rises. As resources dedicated to mining rise over time, efficiency gains and/or mining costs rise. As such, in order to maintain healthy profit margins for miners, a rising hash rate is typically needed to correspond with a rising bitcoin price. Tradeblock’s generated assumptions for cost calculations. Analysts and Controversial Stock-to-Flow Charts Show the Halving Could Propel BTC’s Price to $100K


Tradeblock stressed that the gross cost to mine a single BTC after the halving would need to be around $15,062 per coin. However, by adjusting the assumption that hashrate remains relatively flat then the cost would drop to $12,525 per BTC. “It is important to note, however, that large scale commercial mining pools such as those operated by Bitmain will likely have a lower device price point as they will be utilizing Antminer devices at cost,” Tradeblock’s report highlights. “As such, this would allow breakeven costs to be somewhat lower than the above estimates.”



The Tradeblock report follows the report published in September by Bayerische Landesbank (Bavarian State Bank), which estimated BTC prices could touch $90,000 soon. The report’s estimates and reasoning derive from speculation concerning the reward halving and the controversial stock-to-flow (S2F) system. News.Bitcoin.com recently reported on how a few S2F charts show a possible climb to the $100K mark. Traders who wholeheartedly believe in S2F technical analysis think that the reward halving is one of the biggest reasons why the $100K price is achievable. Additionally, onchain data indicates that BTC miners are hoarding coins as the difference between freshly generated coins and their first spends have consistent gaps week after week. Statistics from Bytetree’s “Generation / On-chain 1st Spend” data shows lots of miners are hoarding coins prior to the halving.


Tradeblock’s report assumes miners will continue to expend resources in order to secure the network despite the reward halving. The study’s data suggests that the “cost (per mined btc) increase following the halving” will surely happen, but the rise in price is theoretical. “This suggests that miners are likely expecting the price of bitcoin to rise to higher levels (above ~$12,000-15,000 per BTC) around the halving allowing them to continue to generate a profit, or they likely will look to reduce resources following the halving resulting in a hash rate decline as profitability falls,” Tradeblock’s report concludes. If the price of bitcoin means it is not profitable to mine after the BTC halving in May, significant miner capitulation could occur.


What do you think about the BTC reward halving? Do you think the price is already priced in or do you expect BTC to rise just before the halving? Let us know what you think about this subject in the comments section below.


Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.comnor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader.


Image credits: Shutterstock, Wiki Commons, Twitter, Tradeblock report, bitcoinblockhalf.com, Bytetree, and Pixabay.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.commarketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here. Share this story: Tags in this story Block reward, block subsidy, Blockchain Analytics, Blocks, BTC, BTC halving, BTC Prices, BTC reward halving, capitulation, Cost to mine, Cryptocurrency, Digital Currency, Halving, Halving Report, Hashrate, hoarding, Miners, Mining Operations, Post Halving Cost, Prices, report, subsidy, tradeblock Related Steemit for Sale: Popular Crypto Blogging Platform Sold to Tron, Community Reacts NEWS | Graham Smith


Crypto blogging platform Steemit is undergoing a big change, migrating from its own Steem blockchain to the Tron network. The… read more. 84 PBOC Digital Currency Patents Show the Extent of China"s Digital Yuan NEWS | Kevin Helms


The People"s Bank of China (PBOC) has reportedly filed 84 patents relating to its plans to launch a digital currency.… read more. Jamie Redman


Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today. Please enable JavaScript to view the comments powered by Disqus.

News Feed

9 Crypto Predictions For 2025: Nansen CEO Predicts Biggest Bull Run Ever
Este artículo también está disponible en español. In a thread on X, Alex Svanevik, CEO of leading on-chain analytics platform Nansen, unveiled nine bold predictions for t
Ezra Reguerra22 minutes agoSecurity firm dWallet Labs flags validator vulnerability that could affect $1B in cryptoValidator service provider InfStones disagreed and told Cointelegraph that “nothing close to $1 billion
Ethereum On-Chain Metrics Looking Strong – Momentum Building For ETH?
Este artículo también está disponible en español. Ethereum is attempting to break above the critical $4,000 level as it edges closer to its all-time high. The market has
1 Cent per Kilowatt-Hour: China’s Sichuan Province Encourages Hydro-Powered Bitcoin Mining
1 Cent per Kilowatt-Hour: China"s Sichuan Province Encourages Hydro-Powered Bitcoin MiningThe local government of Ya’an city, in China’s Sichuan province, has announced
Ezra Reguerra14 hours agoIndia to develop dark net monitoring tool to combat crypto fraud: ReportThe tool will monitor crypto wallets and alert the Indian Ministry of Home Affairs about irregular transactions, according
Spaceseven’s Game-Changing NFT Marketplace
Spaceseven’s Game-Changing NFT Marketplace press release PRESS RELEASE.Recently, on the 23rd of November, SpaceSeven launched its state-of-the-art NFT marketplace. The SpaceSeven
Derek Andersen4 hours agoUS Democrats speak up for CBDC global leadership, Republicans fear ‘dark side’Despite approaching the issue from vastly different angles, the two sides were able to agree on a few basics as t
Bitcoin miners may gain $13.9B yearly from 20% shift to AI and HPC: VanEck
Ciaran Lyons5 hours agoBitcoin miners may gain $13.9B yearly from 20% shift to AI and HPC: VanEckBitcoin miners could increase profitability and improve “bad balance sheets” by allocating some of their energy capacit
Stacks 2.0 Advances Bitcoin Into the Age of DeFi and Creates a New Way to Earn BTC
Stacks 2.0 Advances Bitcoin Into the Age of DeFi and Creates a New Way to Earn BTC Stacks 2.0 is set to revolutionize the internet itself by empowering a decentr
Dubai Launching Crypto Valley in Tax-Free Zone – No Personal or Corporate Income Tax
Dubai Launching Crypto Valley in Tax-Free Zone – No Personal or Corporate Income Tax A Dubai government authority has announced that it is launching a crypto valley in the coun
G20 Finance Chiefs Agree Global Policy Responses to Crypto Are Required
G20 Finance Chiefs Agree Global Policy Responses to Crypto Are Required The G20 finance ministers and central bank governors have agreed that crypto regulation cannot be confined t
As Halving Interest Grows, Spectators Discuss Miner Hoards and Capitulation
As Halving Interest Grows, Spectators Discuss Miner Hoards and Capitulation Recently, cryptocurrency advocates have been discussing the upcoming halvings set to happen on the BTC