The price of bitcoin hit a yearly high of $5,332.83 Saturday before dropping on Sunday as investors continue to take a wait-and-see approach as to where the cryptocurrency may head next.
Bitcoin first broke through the $5,000 mark this year on April 4 and has managed to trade between $5,000 and $5,300 since April 6, but has seemingly lost the upward momentum it had.
The small price drop, to $5,252.12 as of 10:20 p.m. EDT, was described by the tech news site Nulltx as a downtrend that “was to be expected” with bitcoin possibly hitting a minor roadblock after a week of “semi-bullish momentum.”
“As long as BTC remains above $5,200, few people will express their concerns, as there is an equal chance the market will bounce back pretty quickly,” the report noted.
The slowing momentum for bitcoin comes at the same time there has been less major news about bitcoin and other cryptocurrencies, though the implosion of alternative cryptocurrency Bitcoin SV did gain attention during the week. But there were some reports that suggest better days ahead for bitcoin.
Alex Krüger, an economist and a global markets analyst, is claiming that bitcoin mining now has a breakeven point of $3,500.
The bitcoin mining operational breakeven for efficient mining operations currently stands around $3550. pic.twitter.com/gQrNYBcvLH
— Alex Krüger (@krugermacro) April 21, 2019
The calculation makes a number of presumptions, with CCN noting that Krüger uses the rate of electricity at $0.055 per kWh, which very much depends on the region in which a bitcoin miner is operating.
Bitcoin mining, which uses dedicated ASIC hardware to process transactions on the bitcoin blockchain, becomes harder over time and hence requires more computing power, which increases costs such as electricity. Although bitcoin miners obtain rewards of bitcoin. there is a breakeven point — that is, the value of the amount of bitcoin they earn versus their costs — and as bitcoin’s price dropped last year, miners started to struggle.
Bitcoin mining firms beganto shut down in November, and even the world’s largest player, Bitmain Technologies Inc. hit rocky waters, laying off staff and more recently canceling plans for an initial public offering.
If Krüger’s estimates are correct, there are calmer seas for bitcoin mining firms ahead.
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