Bitcoin (EXANTE: Bitcoin) has dropped to a point where it's not that profitable to produce, Fundstrat's Thomas Lee said in a report Thursday, CNBC reports.
According to the analyst, Bitcoin now trades essentially at the break-even cost of mining a Bitcoin, currently at $8,038 based on a mining model developed by Fundstrat, which incorporates three factors: the cost of equipment, electricity and other overhead such as maintaining cooling facilities.
The price at which most miners would really start shutting down their operations is around $3,000 to $4,000 per Bitcoin, said Sam Doctor, head of quantitative data science at Fundstrat. He pointed out that Bitcoin also traded at the breakeven cost of mining in January 2015, when the cryptocurrency traded near $200.
According to Doctor, the need to regularly replace equipment actually accounts for more than half the cost of mining.
Bitcoin prices have pushed higher on Friday as the No. 1 digital currency looks to finish the week on a positive note. Bitcoin has gained 4,25% over the past 24 hours and to reach $8,532, according to CoinMarketCap.com.