Profitability Crisis Forces Bitcoin Miners to Sell at $28,000

Bitcoin’s performance in 2023 has been impressive, outpacing U.S. tech stocks with a 62% year-to-date increase. However, the cryptocurrency is facing selling pressure at the $28,000 level. This pressure is suspected to come from Bitcoin miners who are forced to sell their new inventory due to compressed margins, according to the Сoindesk.

The profitability of Bitcoin mining has taken a hit recently. Most machines produced before 2022 are now unprofitable. This has led miners to sell their Bitcoin inventory at current low prices. The selling pressure is particularly noticeable at the $28,000 level.

The Antminer S19 XP, a powerful machine released in 2022, currently has a profitability of $1,200 per year. Given its sales price of $5,000 to $5,500, it would take a miner 55 months to recoup their investment. This long payback period is pushing miners to liquidate their Bitcoin holdings.

However, there’s a silver lining. If Bitcoin prices increase by 10%, miners’ profitability could quadruple. This is based on profitability levels from just a month ago. Therefore, a recovery in Bitcoin prices could significantly benefit miners.

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