Bitcoin is the most institutionally investable crypto as BTC mining margins remain strong despite market uncertainty: report

[ad_1]

The team at BitOoda, a global digital asset financial services and technology platform providing next-generation risk management solutions, best execution brokerage and expert market analysis, notes in a recent The crypto market update as Bitcoin (BTC) fell about 5.1% WoW, settling at $ 46,187 “as of midnight UTC on 8/9”.

The price of BTC had steadily increased and had also started showing considerable strength beyond the $ 50,000 mark for several days before the recent drop. There “seems to be a bit of information selling, with an initial catalyst being El Salvador’s adoption of Bitcoin as legal tender,” the BitOoda team noted in their report, dated September 9, 2021.

These developments were followed by reports that the United States Securities and Exchange Commission (SEC) sent a notice from Wells to digital asset firm Coinbase.

The BitOoda team pointed out that their past experiences with Wells’ reviews in their equity research coverage universe “suggest that at a minimum, this may prove to be a distraction for management that could take several quarters to complete. to resolve”.

The company added that more generally, this is “an iconic way of accelerating regulatory oversight of the crypto space that could refocus investor interest on Bitcoin and away from altcoins.”

The company also noted that while the US regulatory position on Bitcoin is “far from settled,” the Commodity Futures Trading Commission’s (CFTC) view of Bitcoin “as a commodity and the availability of compliant products on the CME position Bitcoin well for institutional investors looking for exposure to the asset class.

As noted in BitOoda’s report, total BTC gains per PH / s “are around 6.94 mBTC, up from around 7.28 mBTC / PH / s last week on Tuesday reset (1 mBTC or milliBTC = 1 / 1000 BTC), when the difficulty increased ~ 4.5%. “

The report also mentions that the Target Hashrate (or the amount of computing power securing the BTC network) is “now around 132 EH / s, while the currently observed Hashrate is around 136 EH / s.” Transaction fees “have fallen from 34 bps WoW to 1.6% miner rewards, or 0.10 BTC per block, with just 7,000 transactions pending in the” Mempool “,” the report adds.

As noted in the update, Bitcoin mining revenue “fell to $ 321 / PH / s per day and $ 350 / MWh after the difficulty was reset, along with drops in spot prices and electricity “.

The BitOoda North American Hash Spread “fell 9.8%, from $ 349 to $ 315. This increase can be attributed to “a fall in average electricity prices at the national level, aggravated by occasional losses”. As previously stated, the BitOoda Hash Spread is defined “as the difference between the cost of electricity per MWh and Bitcoin mining revenues per MWh”.

This gives miners “a quick idea of ​​the surplus generated by their business to cover personnel, overhead, depreciation and profits,” the report explains. The weighted average “US 24-hour wholesale industrial electricity price (5 markets) of $ 34.81 / MWh leads to an overall variance of $ 315,” the report revealed.

The report further noted that older generation S9 class devices “saw their hash spread down by about 11% to $ 64 / MWh. Class S17 devices, the bulk of the installed base, saw a hash gap of around $ 221 / MWh. The report also found that the “132 MWh required to mine 1 BTC with Class S19 platforms (up 5 MWh from last week) translates into an electricity expenditure of $ 4,597. “

As of September 9, it “cost $ 16,340 using the S9 platforms, a margin of about 65%, excluding labor.” Thus, energy costs “vary by 1040% of revenues, depending on the generation of equipment used.”

As stated in the update:

“The current price of Bitcoin allows for strong margins capable of absorbing fluctuations in spot and electricity prices, even using older generation S9 platforms. Direct labor costs in the US equate to around $ 710 per MWh on a large scale, but much more for small operations that still need staff for only a few MW of capacity.

The main takeaways from the BitOoda report are as follows:

The regulatory review “underscores our view that Bitcoin is the most institutionally investable crypto-asset”; “While distracting for incumbents like Coinbase, regulations are a critical part of maturing the global landscape and the broader evolution of the digital asset ecosystem”; “Mining margins remain strong, although lower than before the last difficulty reset”; “[BitOoda] evaluating this presents an opportunity for US-based miners to gain share and acquire capacity and new hosting customers on attractive terms.

[ad_2]