Major cryptocurrencies are in the green Wednesday, adding to Tuesday’s gains, which saw most altcoins — coins other than bitcoin — finish higher by as much as 8%.
Bitcoin, the worlds biggest digital currency, remains above the $7,000 psychological level in early New York trading with a single bitcoin last changing hands at $7,524.49, up 0.3% since its 5 p.m. Tuesday levels on the Kraken crypto exchange.
After dipping toward $300 billion on Monday, the total value of all cryptocurrencies has bounced, and was most recently at $332 billion, according to CoinMarketCap.
Are miners being squeezed?
As the overall price trend remains down, one crucial part of the bitcoin industry is changing, and it could have greater ramifications if prices continue to track lower.
“Historically, miners have been true believers and supporters of bitcoin and other cryptocurrencies — choosing to take profits in manageable chunks or holding off on selling coins to support prices,” wrote Thejas Nalval and Kevin Lu of Element Asset Management. “However, the world of mining has changed from one made up of evangelists to one where large-scale facilities reign, making fluctuations in price more deadly.”
Element added that while the actual break-even price to mine a bitcoin isn’t clear, prices may be getting to levels where miners would have to sell holdings to sustain operations.
According to a May report from Elite Fixtures, the cost to mine a single bitcoin in the U.S. is $4,758, $8,723 in Japan and $26,170 in South Korea.
Altcoins and futures showing modest gains early Wednesday
After Tuesday’s rally, it’s been a quiet open for the altcoin market. Ether
is up 0.5% to $570.76, Bitcoin Cash
has added 1.7% to $1,017.20, Litecoin
is up 1.1% at $121.50 and Ripple’s XRP coin
is up 1%, last changing hands at 61 cents.
Much like the spot market, bitcoin futures are off to a slow but steady start. The Cboe June contract
is up 0.2% at $7,515, while the CME June contract
is up 0.5% at $7,535.