Bitcoin Mining in 2021: Growth, Consolidation, Renewables, a | Crypto LVL
Bitcoin Mining in 2021: Growth, Consolidation, Renewables, and Regulation.
Bitcoin (BTC) mining has had a couple of less profitable years. After the highs of late 2017 and early 2018, profitability declined by March 2020 to as little as USD 0.0693 per day for every 1 THash of mining power (having been USD 3.139 in January 2018).
However, with the bull market of late 2020, the price of bitcoin has risen strongly, and with it mining profitability has steadily crept up to USD 0.222, representing a rise of 200% since May’s Bitcoin halving. Given that analysts claim bitcoin’s price still has some way left to rise, this is obviously encouraging news for the mining industry, which looks set to have a consistently better 2021 than 2020.
This is what pretty much everyone within the mining industry estimates will happen, that they expect the sector to expand vigorously in 2021. They also expect to see a degree of market consolidation within the space, and while it’s unlikely that the new year will provide mining with technical innovations, it’s possible that we’ll witness a gradual shift to renewable energy sources, as well as the emergence of regulation that specifically addresses mining.
Bitcoin price growth = mining growth
The 200% rise in mining profitability since May is an instructive figure, given that the price of bitcoin rose by more than 230% over the same timeframe. This is pretty strong evidence that bitcoin price rises continue to drive mining profitability, despite 2020’s halving.
In other words, assuming that the price of bitcoin will rise to, say, USD 100,000 by the end of 2021, the mining industry will expand in parallel.
This is pretty much the consensus view among industry participants, although Tim Rainey, Chief Financial Officer of US-based powerplant-cryptomining hybrid Greenidge Generation, said we may see a temporary contraction at the beginning of 2020.
