Bitcoin Crashes below $20,000 for the First Time since Late 2020, Ethereum Mining Also No Longer Profitable for Many Miners

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Image: TheDigitalArtist (Pixabay)

Today marks one of the bloodiest and depressing days yet in the crypto market. Bitcoin, the world’s leading digital currency, has tripped below another major support level and plummeted to $18,100 at the time of this posting, a value that the coin has not seen since the early beginnings of the euphoric 2020 bull market. Whether to sell at a loss or become bag holders for what could be many years is certainly the question of the day for many investors, as the new valuation has driven immense fear in the market for reasons that include the dip going so far as to fall below Bitcoin’s all-time high from 2017. Ethereum, naturally, has followed in Bitcoin’s wake, dropping below $1,000 and prompting reports that explain why many miners can’t profit off of Ethereum mining anymore due to factors such as rising energy prices. GPU enthusiasts who haven’t warmed up to crypto as a genuine investment yet are presumably thrilled at these developments.

Image: CoinMarketCap

The average cost of electricity in states such as New England, Connecticut, Maine, Massachusetts, New Hampshire, and Rhode Island is over $0.22 per kWh.

Using a single Nvidia 3090 overclocked to generate 130mh/s will cost miners around $1.85-$2.13 per day in electricity. The Ethereum reward for the same GPU is just (0.001625 ETH) $2.03 at today’s price. Therefore any miner paying more than $0.245 for electricity is now paying more for electricity than the value of Ethereum being mined.

At this point, it becomes more cost-effective to turn off the mining rig and buy Ethereum spot using the money that would otherwise be used on electricity. The profitability of mining with GPUs has been steadily decreasing over time. Ethereum is still the most profitable cryptocurrency to mine with a GPU meaning the others are even less profitable. The below graph shows Ethereum’s profitability over time.

Source: CoinMarketCap

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Tsing Mui
News poster at The FPS Review.

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