“However, the economics of bitcoin mining likely create a support level for the cryptocurrency, Doctor said. He said bitcoin miners are more likely to hold bitcoin as its price falls to break-even for operating costs, and sell as its price rises, leading to greater profits,” reports CNBC.
Related: Bitcoin Drubbed Following Raid on Korean Exchange
A key issue with bitcoin economics is the break-even price for miners. If that price is high, some miners could be pinched, but new technologies can potentially lower the break-even price, a factor that could boost bitcoin prices in the open market.
“As of May 6, Fundstrat estimates the cash break-even price for the older Antminer S7 model is $6,003 per bitcoin, and $2,368 for the newer Antminer S9,” notes CNBC.
For more information on the cryptocurrency market, visit our Bitcoin category.