Bitcoin mining in New Zealand no longer profitable due to falling prices
Mining Bitcoin in New Zealand comes at a high price as the cost of energy alone to produce a single Bitcoin may not be financially viable. With the drop in the price of Bitcoin to around $86,000 USD or $147,000 NZD, the expenditure to generate one Bitcoin in New Zealand is currently estimated at about around NZ$173,192.96.
Not surprisingly, analyzing the data from the Cambridge Bitcoin Electricity Consumption Index reveals that 15 of the top 20 Bitcoin-producing countries spend more than $100,000 for the same. Australia stands out among the top spenders, shelling out nearly $259,000. In New Zealand, over 1000 miners are believed to be engaged in Bitcoin mining activities, although most are hobbyists rather than major producers.
Nicolas Turnbull, one of the co-founders of Cryptocurrency NZ, suggests that many New Zealanders are enticed by mining Bitcoin for the exposure it provides rather than for significant financial gains. While the energy cost attributed to mining one Bitcoin exceeds the market price, miners contribute computer power to global pools, earning a share of the ‘Bitcoin block reward’ amounting to 3.125 Bitcoin, valued at around $280-300k.
Mining Bitcoin continues to be an attractive asset for New Zealanders. Globally, producers such as the U.S., China, and Russia spend over $100k to generate one Bitcoin. Conversely, countries like Kazakhstan and Canada have managed to produce Bitcoin at a significantly lower cost. Despite the high energy expenditure estimated at 191 terawatt-hours a year on a global scale, Bitcoin miners often utilize surplus or ‘stranded’ energy that would otherwise be wasted, thereby not competing with other sectors for the same resources.
While the U.K. tops the list for the most expensive energy required to mine a Bitcoin daily, at around $266k, Turnbull explains that for most hobbyists, profitability is not the sole motive. Some New Zealand hobbyists are producing their own renewable energy and using the excess generated by high-powered mining computers to heat their homes.
Moreover, Turnbull highlights the additional developments that have been encouraging Bitcoin enthusiasts. With anticipated changes in tax policies that could potentially exempt capital gains on Bitcoin spending under $1000, Bitcoin’s appeal is expected to broaden. This, coupled with an evolving regulatory landscape, has created a ripple of change within the industry.
