Cryptomining is one of the main ways for individuals to obtain cryptocurrencies such as Bitcoin (BTC), as they earn rewards for confirming transactions and securing the network. However, if the price of the first digital asset drops significantly, mining may become less profitable.
According to Frank Holmes, CEO of US Global Investors, the minimum price below which Bitcoin miners can stop their operations is $12,000, because this is the breakeven point when they become unprofitable, he said in an interview with financial media. gasoline It was broadcast on October 19.
The machines stopped at $12,000?
Holmes, who predicted earlier this year that bitcoin could outpace gold thanks to the participation of millennials, challenging the precious metal’s status as a store of value, argued that:
“Globally, it is now basically suggested that you would need to get about $12,000, everyone starts shutting down, the average person starts shutting down. [their mining machines]. “
Meanwhile, the price of the major digital asset at the time of writing is $19,139, down 0.45% in the past 24 hours, but up 0.65% over the week, according to CoinMarketCap data.
The future of bitcoin mining
Although Bitcoin bulls and bears struggled for momentum as the asset struggled to reach the psychological $20,000 level, miners remained unconcerned, as evidenced by the mining hash rate hitting a new all-time high (ATH) in early October.
But if the bleaker forecast materializes, it could spell disaster for crypto miners, especially in light of the European Union’s proposal for a new law aimed at creating energy efficiency labels for assets like bitcoin as part of curbing energy consumption in the sector.
Interestingly, a quarterly study found that bitcoin mining consumes only 0.16% of global energy production, as well as 0.1% of global carbon dioxide production, despite critics focusing on its negative environmental impact, Coinphony reported.
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The CEO of US Global Investors has revealed that Bitcoin mining will shut down globally if BTC reaches $12,000 for the first time on Coinphony.