Bitcoin Mining Might Shut Down Globally If Bitcoin Price Drops Below This Level – Says F. Holmes, CEO at Global Investors
Despite significant advancements in energy efficiency and sustainability, Bitcoin’s energy consumption has increased by 41% year over year (YoY). However, there are worries the increase may prompt regulators to crack down on crypto mining.
As a reward for validating transactions and protecting the network, crypto mining is one of the primary ways that people can acquire cryptocurrencies like Bitcoin (BTC). However, mining the first digital asset can become less lucrative if its price falls sharply.
The break-even point at which Bitcoin mining operations become unprofitable, according to Frank Holmes, CEO of investment firm U.S. Global Investors, is $12,000; he made this claim in an interview with financial media source Benzinga webcast on October 19.
Early this year, Holmes expressed his opinion that Bitcoin could surpass gold due to the involvement of millennials, therefore undermining the precious metal’s role as a store of value.
When “it’s basically inferred that you’re going to have like $12k,” as it is today, “everyone starts shutting down,” meaning that the typical individual stops using their mining rigs, “globally, right now it’s basically implied that you’ll have to have like $12k.”
At the same time, the price of the flagship digital asset was $19,139 at the time of publication, down 0.45% in the previous 24 hours but up 0.65% week-over-week, as recorded by CoinMarketCap.
Prospects for the Bitcoin mining industry
In spite of the fact that Bitcoin’s bulls and bears have been forced to fight for traction while the asset has been attempting to reach the psychological level of $20,000, Bitcoin’s miners have managed to remain uninterested. This is indicated by the fact that the mining hash rate reached a new all-time high (ATH) in early October.
The European Union is putting up a new rule that aims to create energy efficiency labels for assets like Bitcoin in an effort to limit energy use in the industry. If the worst predictions come true, it may be disastrous for cryptocurrency miners.
According to reports in the media, the findings of a quarterly study indicate that Bitcoin mining only accounts for 1 percent of global CO2 emissions and only consumes 0.16 percent of the world’s total energy output.
On Oct. 18, the EU issued a proposal to implement the European Green Deal and the REPowerEU Seek, both of which plan to monitor crypto mining and its environmental effects.