Bitcoin mining profitability poised for surge as spot ETFs gain approval
Jan 12, 2024
New Delhi [India], January 12 : Bitcoin mining is expected to witness a significant boost in profitability following the approval of Bitcoin Spot ETFs by the US Securities and Exchange Commission (SEC) on January 10.
According to S&P Global Commodity Insights, the long-awaited decision has created a ripple effect in the Bitcoin community, with trading of these ETFs set to commence on January 11 on major platforms such as Cboe, NASDAQ, and NYSE.
The approval of Bitcoin Spot ETFs is seen as a pivotal development that opens the door for many new institutional investors, offering them familiar and well-established investment instruments.
Kjetil Pettersen, CEO at KryptoVault, emphasised that the issuers of Bitcoin ETFs would need to hold the underlying asset, leading to an anticipated surge in demand for Bitcoin.
As Bitcoin's supply is capped at 21 million, the increased demand is expected to drive up its price, subsequently enhancing profitability for miners.
"This means the price will go up, thereby increasing profitability for miners as well," explained Pettersen, highlighting the potential positive impact on Bitcoin mining economics.
The Bitcoin Renewable Quarq Spreads Index, a profitability indicator for Bitcoin miners published by Platts, reflects the optimistic sentiment.
According to Platts, Norway's NO4's profitability stood at USD 79.35/MWh on January 10, while the day-ahead power price in the region was registered at Eur26.95/MWh.
The Nordic Hydro Guarantee of Origin certificate's current vintage was assessed at Eur3.83/MWh on the same day.
In the US, the Platts index for Into GTC indicated a Bitcoin mining profitability of USD 80/MWh, and USD 87.69/MWh for the Texas ERCOT North hub on January 10.
These figures underscore the potential for increased profitability in Bitcoin mining operations.
The Bitcoin Energy Consumption Index, also managed by Platts as part of S&P Global Commodity Insights, showed a reading of 405.99 MWh on January 10.
Although slightly below the all-time high of 429 MWh recorded on January 5, this index suggests a substantial level of energy consumption associated with Bitcoin mining activities.
The Platts Bitcoin Renewable Quarq Spreads Index provides a comprehensive overview of Bitcoin mining profitability across 42 locations in Europe and the US.
As the market eagerly awaits the initiation of Bitcoin Spot ETF trading, miners and investors anticipate a new era of increased demand and enhanced profitability in the Bitcoin mining landscape.
