Older Mining Machines Turn Profitable Again as Bitcoin Rises Ahead of Halving

Older mining models can now earn 10-20% gross margins after bitcoin’s price jumps to two-month highs.

AccessTimeIconApr 30, 2020 at 10:41 a.m. UTC
Updated Sep 14, 2021 at 8:35 a.m. UTC

With bitcoin's price jumping to a two-month high above $9,000, even mining equipment thought obsolete is becoming profitable again, at least for a short time.

According to the miner profitability index, tracked by mining pools PoolIn and F2Pool, older mining rigs, such as Bitmain's AntMiner S9 or Canaan's Avalon A851, can now generate a 10% to 20% gross margin at an average electricity cost of $0.05 per kilowatt-hour (kWh).

For those that have adopted miner efficiency improvement methods, such as merging two S9s into one or lowering voltage to boost efficiency, gross margin could increase to as much as 30% to 40% at bitcoin's current price.

And as CoinDesk reported earlier this week, the upcoming rainy season in China – which is estimated to account for 70% of bitcoin's total mining power – brings excessive hydropower that will result in electricity costs going under 3 cents per kWh.

Should bitcoin's price and mining difficulty remain constant, older generation mining models like the S9s could remain marginally profitable at these utility rates even after the halving takes the daily number of newly mined bitcoin down from 1,800 to 900 units.

Meanwhile, major manufacturers' flagship machines including Bitmain's AntMiner S17 and S19 series as well as MicroBT's WhatsMiner M20 and M30 series can bring returns of over 60%, even at an average 5 cents per kWh utility cost.

"Today's price movement would bring back even those miners that were recently disconnected due to profitability concerns," said Dmitrii Ushakov, chief commercial officer of Russia-based miner hosting firm BitRiver. "After halving, we believe that the price range of 3 to 4 cents [USD] is sufficient to continue mining profitably with S9 miners if the current price movement continues."

Following bitcoin's price crash on March 12, its worst sell-off in seven years, a wide range of older mining rigs have been forced to unplug from the network, resulting in a 16% mining competition drop in late March.

The mining competition drop, together with bitcoin's price rebound after March 12, initially helped older miners become marginally profitable. As a result, Bitcoin's total hash rate climbed to a near all-time-high of 110 exahashes per second (EH/s) over the past several weeks.

But during the same period, bitcoin's price stagnated around $7,000 for weeks, which put pressure on farms relying on older models ahead of the halving and cooled the purchasing spree for more powerful and top-of-the-line equipment at large scales.

That said, bitcoin mining is a dynamically changing game. As bitcoin's halving approaches in under two weeks, those relying on older mining equipment, without access to cheap electricity resources, face being squeezed out by those running efficient operations.

Mining farm operators previously estimated that older models like the S9 accounted for around 20% of the bitcoin network's total computing power in March, which is a significant drop from a year ago because major players have been replacing these older models with more powerful new equipment during late 2019.


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