Would Bitcoin mining be ‘less profitable’ in 2022 than in 2021?

Argo CEO Peter Wall recently told CNBC that the factors that pushed Bitcoin’s price in 2021 will also influence its price in 2022. Furthermore, he examined how the market has grown over time in terms of both regulatory outlook and capital markets. From a mining standpoint, he stated:

“We’ve seen this year; the industry goes from being essentially teenagers at the start of the year–kind of uncertain in themselves to very confident young professionals in their 20s.”

Bitcoin, which is often referred to as the “king coin” of the crypto market, was trading at $48,611 at the time of publishing. As TheCoinRise reported, Bitcoin has surged its price above $51,000 this holiday season.

Wall further explained that the mining ecosystem is getting more mature these days and commented that the regulatory bodies are taking the space more seriously. 

Wall further predicted that the upcoming year would see more hashrate come offline as more miners are coming to the system. He explained that this is the time when miners are at the most profitable end. Argo CEO went on to say that the margins are still very strong, but we will see a slightly less profitable 2022 than 2021.

Notably, the Bitcoin network hashrate is currently swinging near 182.82 million, which is significantly higher than the levels we saw in October. 

Mining is still highly profitable

With that in mind, The Arcane Research’s current monthly report on BTC mining and mining stocks indicated that until November, mining returns were increasing. However, profitability has declined after that.

Not to add that in the last three months, the relative measure of Bitcoin difficulty and hashrate has risen, reaching a value of 24.20T and 184.09 EH/s, respectively.

Despite the decline, the research declared mining to be a very profitable industry:

“Even though cash flows have fallen, mining is still highly profitable…Even after the recent decline, cash flow margins have improved in 2021 since the bitcoin price has increased faster than the hashrate.”