Despite significant advances in energy efficiency and sustainability, Bitcoin’s energy consumption has increased 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, crypto mining is one of the main ways people can acquire cryptocurrencies like Bitcoin (BTC). However, mining the first digital asset can become less lucrative if its price drops 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.
Earlier this year, Holmes expressed his opinion that Bitcoin could overtake gold due to the involvement of millennials, which would undermine 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, “everybody starts to shut down,” meaning the typical individual stops using their mining equipment, “globally, right now basically it’s Implied that you’ll have to have like $12k.”
At the same time, the price of the flagship digital asset was $19,139 at press time, down 0.45% in the previous 24 hours but up 0.65% week over week, as recorded by CoinMarketCap.
Outlook for the Bitcoin mining industry
Despite the fact that Bitcoin bulls and bears have been forced to battle for traction as the asset attempted to reach the psychological $20,000 level, Bitcoin miners have managed to remain uninterested. This is indicated by the fact that the mining hash rate hit a new all-time high (ATH) in early October.
The European Union is implementing a new rule that aims to create energy efficiency labels for assets like Bitcoin in an effort to limit energy use in industry. If the worst predictions come true, it can be disastrous for cryptocurrency miners.
According to media reports, 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 October 18, the EU issued a proposal to implement the European Green Deal and REPowerEU Seek, both of which plan to monitor crypto mining and its environmental effects.
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This post Bitcoin mining could shut down globally if Bitcoin price drops below this level, says F. Holmes, CEO of Global Investors
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