zeyadsalm

I’m watching the miners

There’s a saying that’s been floating around the Bitcoin community for years:

Bitcoin never trades below its electrical cost for long.

Right now, many mining-cost models estimate Bitcoin’s electricity cost to be around $49,000. That number isn’t magic, and it isn’t a guaranteed bottom. But it’s one of the most interesting fundamental levels on the market because it tells us where mining starts becoming far less profitable for a large portion of the network.

Think about it this way.

Gold has a production cost. Oil has a production cost. Bitcoin is no different.

Every new BTC requires real-world resources to produce electricity, mining hardware, cooling systems, and infrastructure. When the market price falls close to or below the average cost of production, weaker miners begin shutting down their machines because they’re no longer making money. That naturally reduces selling pressure from miners and often creates a floor where supply starts tightening. It’s one of the reasons production cost is watched by long-term investors.

But here’s where I think people oversimplify this.

Bitcoin has traded below estimated production costs before, especially during panic events like the COVID crash in 2020 and parts of the 2022 bear market. The difference is that those periods didn’t last very long. Historically, whenever Bitcoin has spent time below the average mining cost, it has often marked periods of extreme capitulation rather than the beginning of a prolonged collapse.

That’s why I treat mining cost as a zone, not an exact number.

The current estimate around $49K tells me something important: if Bitcoin starts moving toward that area, miners will come under increasing pressure. Some will sell reserves, some will reduce operations, and the least efficient miners may switch off completely. At the same time, long-term investors often start paying closer attention because Bitcoin is approaching a level where it’s becoming increasingly expensive to produce compared with its market value.

This is also why I never rely on one metric.

Mining cost is only one piece of the puzzle.

ETF flows, macroeconomic conditions, liquidity, stablecoin supply, interest rates, and on-chain demand all matter just as much. Bitcoin doesn’t move because of one indicator. It moves because dozens of forces line up at the same time.

If Bitcoin is trading comfortably above its estimated electrical cost, miners generally remain healthy and the network stays strong.

If price approaches that level, I don’t panic.

I pay attention.

Because some of the best long-term opportunities in Bitcoin have appeared when the market gets uncomfortably close to the cost of producing a coin.

#BTC走势分析 #VeChainNodeMarketplace