r/BitcoinMining • u/Altairandrew • 2d ago

General Discussion When prices fall

Do people stop mining when BTC prices fall below some level. I know there are some who wouldn’t. But at some point cheaper to buy btc than mine it.

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u/solenico 2d ago edited 2d ago

At least where I live the costs are reduced from the mining income and the net income is taxable. If I spend money from another income income I pay income tax for that. In that sense I don’t care if the mining is occasionally unprofitable.

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u/Discokruse 2d ago

If you spend $100 in electricity to mine $80 of bitcoin, you have a $20 loss in that tax year. If you sell that bitcoin over a year later for $200, you pay 15% on $120 of long term capital gains.

Don't stop mining, even if you are unprofitable. Stack sats and let them cure for 366+ days.

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u/solenico 2d ago

I might have $40 loss at one month and $40 dollar profit another. This means I’m not paying tax when I combine loss and profit since net sum is $0. It’s still better than buying since I pay income tax.

Another thing to add is that during winter the miner practically heats my house so even with constant loss it’s actually profitable all tax indications plus heating counted as whole even with relatively high electricity price.

My system goes down when electricity goes above 40c/kWh or so. This happens rarely but it happens time to time. Twice this year. The average I paid for electricity this year is under 10c/kWh and minimum around 4c/kWh. I have SPOT price so the price does fluctuate a lot. Typically at summer electricity is very cheap but at winter it can go really high. Which is why I have coded the automatic shutdown and startup based on price.

The other thing is I get rewards without any transfer or conversion fees. That’s not the case when I buy BTC – well, transfer actually is free with Strike using flexible.

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u/Discokruse 2d ago

Probably should get the api info for when electricity is under 10c/kWh and have the miners turn themselves off when power cost is high. That way, you'll likely only mine at night when you need the heat anyways.

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u/solenico 2d ago

It’s way colder here than you think. Finland. The heating by miner is not even enough during winter. I have calculated the break even point with the heating included.

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u/Discokruse 2d ago

Sounds like you need more miners to subsidize heating requirements. Especially if electric rates drop at nighttime. How fortunate for you.

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u/solenico 1d ago

Electricity drops whenever there’s wind and that might be whatever time of of year and day. It can go even to minus when the wind turbines generate so much energy to the grid and hydro power plants would flood if they wouldn’t generate electricity.

But yes between 10pm and 7am the price drops always 2c/kWh. Currently we’re at 5c/kWh.

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u/Discokruse 1d ago

Would you like me send you some miners to mine at 2c/kWh? My treat. Split the revenue 3 ways: you, me, and the power company?

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u/solenico 1d ago

No thanks I'm good. Just took the one and only miner I have inside to heat my house :-) It was under 19C / 66F inside so I need the heating. Basically no matter what the electricity price is I'm not paying any extra. 100% of the electricity will be released as heat and that is away from normal heating.