Bitcoin (BTC) is Not Worth Mining Anymore, Top Crypto Academic Says

The latest drop below $3,400 in the Bitcoin (BTC) price 24 hours ago has now confirmed that mining the digital asset is no longer profitable. At least that is what a certain crypto academic believes. Gavin Brown works as a senior finance lecturer at the Manchester Metropolitan University. According to Brown, Bitcoin’s (BTC) drop below 3,400 is a sign that the price of the digital asset is below the global production weighted cost, which is $4,060 as of the fourth quarter of last year.

Bitcoin (BTC) Price Today – BTC / USD

NamePrice24H %
bitcoin
Bitcoin(BTC)
$0.00-0.15%

Brown maintains that the break below $3,400 spells bad news for Bitcoin miners.

Brown: Drop to $3,400 is a Decline Below the Amount of Electricity Used in Mining Bitcoin (BTC)

The $3,400 level, which has since been called a landmark figure, was attained as Bitcoin (BTC) continues its down spell beyond a position where the amount of energy used in mining outweighs the value of the coin. This point initially came in last November when BTC dropped from $6,500 to levels that have left the majority of miners ceasing their mining operations.

Of course mining operations still going on around the world, but the state of the crypto market presently means that mining has been curtailed significantly.

Brown: Recent Price Action May be Damaging for Bitcoin (BTC) At Least in the Short-term

According to Brown, the recent drop will be damaging to the Bitcoin (BTC) mining space; it won’t mean the end for the digital asset, at least in the short-term to medium-term. The university lecturer also believes that the marginal costs of production are driven by electricity rates, which is a representation of the majority of the total expenditure. While hardware expenditures is a material outlay or a sunk cost, which indicates, that miners have a chance to maintain their efforts longer than anticipated.

Brown also suggested that, in the event that global prices continue to trade or run at a discount to marginal mining costs, more miners would withdraw.

It has to be said that the global exit of Bitcoin miners will not be spread evenly geographically across the network.

Rather, as Brown puts it, we are likely to see more locations of higher electricity rates see more pronounced costs of withdrawal compared to a low-cost Chinese miner who has the option to obtain electric energy at discounted rates.

This, he believes, will result in greater centralization of Bitcoin (BTC) mining operations in places like China which reportedly hosts 74% of Bitcoin mining farms and exposes the issue of cyberattacks

Brown: Bitcoin To Remain Bearish in the Medium Term to the Long Term

The crypto academic went on to declare that he is relatively bearish regarding the Bitcoin price for the medium term to be the long term. In Brown’s words:

Bitcoin (BTC) remains the leader by first mover upside and shows ‘flight to quality’ attributes as seen by its dominance in excess of 50%. Nonetheless, it is the gateway digital currency for many adopters and trading pairs on exchanges. However, with new use cases and more appetite to understand the distributed ledger technology (DLT) by industry, Bitcoin’s future may be bleak, but better for the wider virtual asset space.”

Brian Lubin is a Crypto News Reporter for Smartereum. He's well-known for his reports on the crypto markets.

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