Bitcoin mining could shut down globally if Bitcoin price falls below this level – says F. Holmes, CEO of Global Investors
Despite significant advances in energy efficiency and sustainability, Bitcoin’s energy consumption has increased by 41% year-over-year (YoY). However, there are concerns that the increase could prompt regulators to crack down on crypto mining.
As a reward for validating transactions and protecting the network, cryptomining is one of the main ways people can acquire cryptocurrencies such as Bitcoin (BTC). However, mining the first digital asset may become less lucrative if the price falls sharply.
The breakeven point at which Bitcoin mining becomes unprofitable, according to Frank Holmes, CEO of investment firm US 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 engagement of millennials, thereby undermining the precious metal’s role as a store of value.
When “it’s basically assumed you’re going to have around $12,000,” as it is today, “everyone starts shutting down,” meaning the typical person stops using their mining rigs, “globally, right now is it basically suggested you have to have $12k.”
Meanwhile, the price of the flagship digital asset was $19,139 at press time, down 0.45% over the previous 24 hours but up 0.65% week-over-week, as recorded by CoinMarketCap.
Outlook for the Bitcoin Mining Industry
Despite Bitcoin’s bulls and bears being forced to scramble for traction as the asset attempts 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 hashrate reached a new all-time high (ATH) in early October.
The European Union is setting up a new rule that aims to create energy efficiency labels for assets like Bitcoin in a bid to limit energy use in industry. If the worst predictions come true, it could be disastrous for cryptocurrency miners.
According to media reports, the findings of a quarterly study indicate that Bitcoin mining accounts for only 1 percent of global CO2 emissions and consumes only 0.16 percent of the world’s total energy production.
On October 18, the EU issued a proposal to implement the European Green Deal and REPowerEU Seek, both of which plan to monitor cryptomining and its environmental effects.
