gfp Posted January 31 Posted January 31 1 hour ago, Whensthepaintdry? said: @TwoCitiesCapital it costs 50-60k of electricity to mine a btc? That sounds kind of bonkers. From Gemini (which is an AI for you fossils): As of late January 2026, the estimated average electricity cost to mine a single, whole Bitcoin is approximately $59,450. When including additional operational overhead (hardware depreciation, cooling, and facility maintenance), the "all-in" net production expenditure is currently estimated at $74,300. Current Economic Context (January 2026) The mining sector is currently facing a period of significant "margin compression." With Bitcoin trading around $83,000–$84,000 this week, the profitability ratio has hit a 14-month low. Several factors are driving these costs: Post-Halving Dynamics: The 2024 halving reduced the block subsidy to 3.125 BTC, effectively doubling the energy required per coin compared to the previous epoch. Network Difficulty: The global hashrate remains near record highs (approaching one zettahash), forcing miners to use more power to secure the same probability of winning a block. Regional Variance: While the global average sits near $60k, regional costs vary wildly. In the United States, high commercial rates (~$0.14/kWh) have pushed the local cost to mine one BTC as high as $130,000, making many U.S. grid-tied operations currently unprofitable. Cost Breakdown by Efficiency Profitability in 2026 is almost entirely dictated by your electricity rate and hardware efficiency (measured in Joules per Terahash, or J/TH). Scenario Electricity Rate Estimated Energy Cost per BTC Highly Efficient $0.047 / kWh ~$20,000 Global Average ~$0.07 / kWh $59,450 U.S. Grid Average $0.141 / kWh ~$130,000 Export to Sheets Market Implications The Cambridge Bitcoin Electricity Consumption Index (CBECI) recently noted that for 15 of the world's top 20 mining nations, it now costs more in energy to mine a Bitcoin than to purchase it on the open market. This has led to a "miner exodus," where some publicly traded firms (like Bitfarms) are reportedly winding down mining operations to pivot their power capacity toward AI data centers, which currently offer more stable returns on power.
jfan Posted January 31 Posted January 31 41 minutes ago, gfp said: From Gemini (which is an AI for you fossils): As of late January 2026, the estimated average electricity cost to mine a single, whole Bitcoin is approximately $59,450. When including additional operational overhead (hardware depreciation, cooling, and facility maintenance), the "all-in" net production expenditure is currently estimated at $74,300. Current Economic Context (January 2026) The mining sector is currently facing a period of significant "margin compression." With Bitcoin trading around $83,000–$84,000 this week, the profitability ratio has hit a 14-month low. Several factors are driving these costs: Post-Halving Dynamics: The 2024 halving reduced the block subsidy to 3.125 BTC, effectively doubling the energy required per coin compared to the previous epoch. Network Difficulty: The global hashrate remains near record highs (approaching one zettahash), forcing miners to use more power to secure the same probability of winning a block. Regional Variance: While the global average sits near $60k, regional costs vary wildly. In the United States, high commercial rates (~$0.14/kWh) have pushed the local cost to mine one BTC as high as $130,000, making many U.S. grid-tied operations currently unprofitable. Cost Breakdown by Efficiency Profitability in 2026 is almost entirely dictated by your electricity rate and hardware efficiency (measured in Joules per Terahash, or J/TH). Scenario Electricity Rate Estimated Energy Cost per BTC Highly Efficient $0.047 / kWh ~$20,000 Global Average ~$0.07 / kWh $59,450 U.S. Grid Average $0.141 / kWh ~$130,000 Export to Sheets Market Implications The Cambridge Bitcoin Electricity Consumption Index (CBECI) recently noted that for 15 of the world's top 20 mining nations, it now costs more in energy to mine a Bitcoin than to purchase it on the open market. This has led to a "miner exodus," where some publicly traded firms (like Bitfarms) are reportedly winding down mining operations to pivot their power capacity toward AI data centers, which currently offer more stable returns on power. I think the global electricity rate is too low GlobalPetrolPrices.com
TwoCitiesCapital Posted February 1 Posted February 1 2 hours ago, Whensthepaintdry? said: @TwoCitiesCapital it costs 50-60k of electricity to mine a btc? That sounds kind of bonkers. Wait until you find out how much it costs to ask Grok which starting goalies you should use. Or to generate an image. Or how much America spends in electricity for Christmas lights each year. 2 hours ago, SharperDingaan said: BTC treasuries are reliant upon trust that participants can meet their CME margin calls Which Treasury companies are you alleging own futures on the CME instead of spot product?
SharperDingaan Posted February 1 Posted February 1 (edited) Every BTC treasury will be long some quantity of BTC puts to protect their stack below a catastrophic fall of 'X'. The premium paid as a form of insurance. Thing is, it assumes that 1) the counter party can actually pay the daily MTM gain, and 2) the exchange (CME) can pay it if the counter party fails. To minimise the liability the exchange uses both daily margin settlement, and a % collateral cushion .... that rises in time of stress. Thereafter, failure to meet the margin call, is an immediate forced liquidation .... first loss, being the smallest loss. MSTR seems to have recognised the exposure, hence the very large cushion they now maintain. The other big names ... not so much. Some will have both margined against their stack, AND received more if they used puts to protect the minimum value of the stack. Take away confidence in the collectability of ongoing margin calls, and it can go very badly, very quickly .... Point is, do nothing, and the fall in the price of BTC accelerates until there is a workable intervention ... that may/may not work. The old fashioned piles of gold in the window, to prevent a bank run. Everyone sees the possibility of BTC at 50K on the charts, but doesn't really believe it. We just see how it might happen. Different strokes. Ideally it doesn't happen, but we prefer to be pragmatic. Get it right and it could well be life changing. SD Edited February 1 by SharperDingaan
UK Posted February 1 Posted February 1 9 minutes ago, SharperDingaan said: intervention What do you have in mind here?
SharperDingaan Posted February 1 Posted February 1 (edited) On 2/1/2026 at 2:33 AM, UK said: What do you have in mind here? Lot of possibilities, whether something is done will depend upon the systemic threat at the time. Near a day later, BTC is still only USD 77,300; could go a lot lower some hours from now on Asian margin calls, and contagion that spreads into Monday's NA opening. The Fed is currently doing around 40B/month of liquidity injection, as creditors choose not to roll over their USD denominated debt; this would raise it further. Hoping for an additional sizeable liquidity injection, so that treasuries can sell debt to raise cash for more BTC purchases ... may not be the wisest thing. While an additional injection is one thing, it really needs creditors to also roll their maturing debt for the next little while. Why should we help you .... when you are also putting tariffs on our trade? Karma is such a bitch We're just pragmatic; hence we look primarily at the downside, vs the near term probability of an intervention occurring. The big win for us is a repurchase, just before there is an intervention, a resultant dead cat bounce, a resale, and a repurchase some weeks later. Rationale, but not what many would call 'investing' Take care. SD Edited February 2 by SharperDingaan
Dalal.Holdings Posted February 1 Posted February 1 "Intervention" by the Federal Reserve to save the "decentralized" asset holders who've found central banks (and everything associated such as fiat currency) an anathema since day one?
gfp Posted February 3 Posted February 3 On 1/31/2026 at 11:15 AM, gfp said: I'm just basing it on the pattern from 2022. Maybe there should be some adjustment for log scale that means start looking at it at $66k and add as it declines - nothing is every going to be an exact number that is "correct" - but until this pattern stops looking exactly like 2022 I'm not going to assume it will go any differently. When the chart says something different, change your expectations. But for now, the price is trading exactly like it is breaking down from a bear flag in the exact same way as it did in 2022. People like to dunk on charts as bullshit and I'm sure there is plenty of that out there. But people also like to lie to themselves that something is in an uptrend when it clearly isn't and the chart isn't going to lie. This is a downtrend until something changes. It still looks exactly the same as 2022. Why not make the price action prove to you something is different? A classic traded asset without any supply response to high prices. Highly levered market participants, margin calls, liquidations, plenty of "technical" traders - if any market at all is suited for watching chart patterns it would be this one.
Parsad Posted February 4 Posted February 4 https://finance.yahoo.com/news/michael-burry-warns-cascading-effects-001910407.html Cheers!
Paarslaars Posted February 4 Posted February 4 (edited) Ah yes Burry, the broken clock that struck right once. Wasn't he short PLTR and then when it went up decided to stop his fund because he doesn't understand the market anymore? I think the fact that BTC is seeing terrible sentiment and one of its longest downstreaks in history, while remaining above its pre-election high, is rather strong. His comments on strategy are also irrelevant: If BTC drops below Saylors purchase price, it does not close him off to markets. He is nowhere near insolvency and has enough cash to cover 2 years of dividends. If the market keeps its confidence then STRC will trade up to 100$ and he can issue. If I'm not mistaken, MSTR bitcoin stack was underwater during the 2022 bear market as well, they did just fine: Just more FUD in my opinion. Edited February 4 by Paarslaars
Milu Posted February 4 Posted February 4 (edited) 2 hours ago, Paarslaars said: Ah yes Burry, the broken clock that struck right once. Wasn't he short PLTR and then when it went up decided to stop his fund because he doesn't understand the market anymore? I think the fact that BTC is seeing terrible sentiment and one of its longest downstreaks in history, while remaining above its pre-election high, is rather strong. His comments on strategy are also irrelevant: If BTC drops below Saylors purchase price, it does not close him off to markets. He is nowhere near insolvency and has enough cash to cover 2 years of dividends. If the market keeps its confidence then STRC will trade up to 100$ and he can issue. If I'm not mistaken, MSTR bitcoin stack was underwater during the 2022 bear market as well, they did just fine: Just more FUD in my opinion. Yea agree with most of this. I do wonder about some of the research many of these supposed though leaders put into the things they right. I see a lot of talk about how Mstr is doomed if bitcoin falls below its average cost as if this is something that has never happened before. Or that MSTR is going to be in some doom loop. While the bitcoin treasury company concept isn’t necessarily my personal choice, and I just prefer bitcoin, there does seem to be a lot of nonsense out there right now regarding some hypothetical forced selling event that is supposedly coming soon. Edited February 4 by Milu
Fly Posted February 4 Posted February 4 1 hour ago, Milu said: Yea agree with most of this. I do wonder about some of the research many of these supposed though leaders put into the things they right. I see a lot of talk about how Mstr is doomed if bitcoin falls below its average cost as if this is something that has never happened before. Or that MSTR is going to be in some doom loop. While the bitcoin treasury company concept isn’t necessarily my personal choice, and I just prefer bitcoin, there does seem to be a lot of nonsense out there right now regarding some hypothetical forced selling event that is supposedly coming soon. Yes exactly like last cycle. There was some supposed price where MSTR would face a margin call and liquidation, Saylor denied it. Price dropped below the supposed liquidation price and ... nothing happened. MSTR recovered and that remained one of the best buying opportunities for the stock. I do expect better from Burry, but in reality he has been a permabear since his success with the GFC. Every hammer sees a nail type of thing.
TwoCitiesCapital Posted February 4 Posted February 4 (edited) Yea. I subscribe to Burry's substack. He does good research on long names. I disagree with him here. MSTR was an obvious short at 2-4x it's NAV. Now? I'm actually long a small but for the optionality that it outperforms BTC either through additional acquisition of BTC/share OR through another manic episode where people believe 4x makes sense. Is disappointing to me that people were willing to throw $100 at MSTR to buy $25 worth of BTC. Probably why the price topped so low as flows were redirected to these insane multiples to buy a fraction of the BTC on chain, but I got involved with alts last cycle and learned a lesson. I hope people here learned a lesson and we can all improve going forward. Edited February 4 by TwoCitiesCapital
SharperDingaan Posted February 4 Posted February 4 (edited) BTC at USD 74,540. Today, if you could buy back a BTC position, would you buy back the same quantity, or less ? Most would buy back less, so as to allow for a later purchase at a hopefully lower price . That 'usual' 5% portfolio weighting temporarily now only returning to 3-4%, resulting in a portfolio rotation of 1-2% out of BTC. Treasurers hold BTC for the positive carry (gain on sale at a higher price), and use derivatives to exit and enter at progressively lower prices; spiking price volatility around contract expiry dates. Markets are also driving Investment Policy refreshments to reduce the maximum weighting to BTC, all reducing corporate/state/municipal treasury demand for BTC. One has to think that most miners and BTC treasuries are now at break-even, or below. For most, new cash raised will be going into margin reduction, to mitigate against a partial forced liquidation of BTC collateral. Absent a new demand, new BTC treasury purchases are likely to be limited until there is certainty around the 'bottom'. The rise from USD 60,000 to USD 120,000 was all about adoption. Approval/introduction of the BTC/ETF, marketing of the 5% weighting towards BTC, acceptance of BTC as a corporate/state/municipal near cash equivalent, dispersion into stable-coin versus just BTC lowering the entry price to new entrants. Most of this now pulling back ... but the demand for BTC remains dispersed. Lower lows that might otherwise be the case. We may not like what Burry has to say, or think he's out of touch on some of the specifics; but he may well be directionally correct. Doesn't mean that the utility of BTC is diminishing ... simply that it is becoming available at better value. Precisely what a 'value investor' would want . SD Edited February 4 by SharperDingaan
gfp Posted February 4 Posted February 4 You do have to ask yourself how many people could have just googled "hey google, what the hell is a bear flag?" and saved themselves some time
73 Reds Posted February 4 Posted February 4 (edited) 9 minutes ago, gfp said: You do have to ask yourself how many people could have just googled "hey google, what the hell is a bear flag?" and saved themselves some time I googled it and am still perplexed. It talks about what happens (next leg down) when everyone is caught off guard. But if anyone can Google it and knows what it is, why is anyone caught off guard? Why is the pattern even allowed to form in the first place? Here's a thought: Lack of substance in the underlying? Or maybe entirely random? Edited February 4 by 73 Reds missed line
TwoCitiesCapital Posted February 4 Posted February 4 (edited) For as many structures as I've seen validated, I've also false breakouts/breakdowns as well as breakouts/breakdowns that were never confirmed via a retest of support/resistance. I'm not saying it doesn't work - I just haven't figured out how to use it reliably. If I entered before confirmation from a retest, it's inevitably a false break out/breakdown. If I wait for confirmation, it doesn't come and I miss the entire move. If I receive confirmation, it doesn't always make it to the price targets implied by the moves and I still enter/exit too early or too late. Ultimately, I have found RSI and moving averages really to be the only informative metrics and even those are trailing and aren't consistently reliable. They're just a good tell of where current sentiment is at. So I'll just DCA and try to rely on the fundamentals of the underlying to determine what I'm willing to pay for it. Has worked out so far even with missing the tips and bottoms for trading purposes. Edited February 4 by TwoCitiesCapital
gfp Posted February 4 Posted February 4 That was my point on highlighting the LITE trade in real time on the "chart patterns / technical analysis" thread. Human behavior is WAY more predictable when a widely observed chart pattern is negated than when it "does what it is supposed to do."
SharperDingaan Posted February 4 Posted February 4 (edited) Charts are just 'market' predictions on what may happen next; as it's an art, it's wiser to take the consensus opinion. Thereafter there is a need to follow good audit practice; 'trust, but verify!'. Do you get a similar directional outcome forecasting what may happen next ... via a totally different approach?; if so, you have something. What you do with it, depends on your experience and risk tolerance; maybe 30% of all who have the opportunity, will actually execute on it. SD Edited February 4 by SharperDingaan
SharperDingaan Posted February 4 Posted February 4 34 minutes ago, TwoCitiesCapital said: Ultimately, I have found RSI and moving averages really to be the only informative metrics and even those are trailing and aren't consistently reliable. They're just a good tell of where current sentiment is at. +1. Just keep in mind that when the entire industry is hated (oil/gas); all the industry RSI's will be low. Compare against the company peers to avoid getting burned SD
Parsad Posted February 5 Posted February 5 https://finance.yahoo.com/news/bitcoin-sinks-after-treasury-secretary-bessent-says-us-government-cant-tell-banks-to-bail-out-crypto-195504406.html Cheers!
UK Posted February 5 Posted February 5 8 minutes ago, Parsad said: https://finance.yahoo.com/news/bitcoin-sinks-after-treasury-secretary-bessent-says-us-government-cant-tell-banks-to-bail-out-crypto-195504406.html Cheers! Who would have thought that crypto would need a fiat bailout:)))
Paarslaars Posted February 5 Posted February 5 (edited) Well that looks like normal policy to me... not sure why anyone would expect anything different. That said, you think Trump won't bail out his sons and his own company? Anyway BTC down to 70k, basically trading at mining cost. Historically this has always indicated a bottom, though reversal can take a few months. We've also +/- reached last cycle's top, which is also a typical bottom indicator. That said, all predictions are typically wrong... let's see what happens. Edited February 5 by Paarslaars
Charlie Posted February 5 Posted February 5 One year ago at the Trump trade thread I suggested shorting bitcoin, when the Trump euphoria is gone. It is all playing out. American Bitcoin was the easiest short I ever saw. Bitcoin is following. Unfortunately I did not short anything.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now