The rise in mining electricity costs changes the shutdown price: Can Bitcoin rebound?

At the deepest level of the Bitcoin market, mining profitability has always played a role in supporting the price floor. Currently, with BTC trading around $89.09K (as of January 28, 2026), the mining industry is facing a critical turning point. Half of the mining machines are on the brink of shutdown, and electricity costs are becoming more burdensome than ever. This structural change raises a fundamental question: does the traditional theory that “shutdown prices indicate market bottoms” still function, or are new rules about to emerge?

The Basic Structure of Shutdown Price and Mining Profitability

The survival strategy of the mining industry is simple yet ruthless. When the electricity costs consumed by miners exceed mining revenues, the machines have no choice but to stop. The shutdown price refers to the critical point at which miners can no longer cover their electricity expenses.

The calculation formula is as follows:

Shutdown Price = (Daily Power Consumption × Electricity Rate) ÷ (Daily Bitcoin Production × Pool Fee Coefficient)

For example, considering the Ant S19, with a daily power consumption of 72kWh and an electricity rate of $0.06 per kWh, if it generates about 0.0002 BTC per day, the shutdown price would be approximately near $85,000. The fact that this level is very close to the current market price suggests that half of the industry is in a state of crisis.

However, the shutdown price is not fixed. If miners move to regions with cheaper electricity, the price fluctuates, and if the Bitcoin network’s difficulty adjustment occurs every two weeks, profitability calculations are updated. Furthermore, the emergence of new mining machines fundamentally changes the industry’s perception of electricity costs.

Testimony of History: Market Reactions Triggered by Mining Machine淘汰

Looking at past Bitcoin market trends, there is a clear correlation between shutdown prices and market rebounds.

December 2018 Bottom

The currency price plummeted to $3,150, and Bitmain’s S9 mining machines (shutdown price around $3,500) were widely shut down. Over the next six months, the price surged by 344%, recovering to $14,000. The shutdown of mining machines reduced miners’ daily selling pressure (about 900 BTC/day), concentrating funds entering the market.

March 2020 “Black Thursday”

The currency price halved to $3,800, and the network’s total hash rate dropped by 30%. Subsequently, Bitcoin entered a magnificent bullish market, reaching $65,000 in just 15 months. Difficulty adjustments acted like a spring, and the deeper the compression, the stronger the rebound energy.

2022 Bear Market

When the currency price fell below $20,000, North American listed mining companies had to sell their Bitcoin holdings to pay electricity bills. With a 26% decrease in computing power, the currency price turned upward again in early 2023.

The reason these scenarios repeated so often lies in the self-healing mechanism of the market ecosystem. The concentrated shutdowns by miners reduce selling pressure, and institutional investors see the shutdown price as a “cost floor” and buy at the bottom. Difficulty adjustments reinforce this cycle.

The Impact of Next-Generation Mining Technology on Electricity Efficiency

However, this familiar scenario now faces new uncertainties. New generation machines like Ant S21 XP have significantly lowered the shutdown price to $29,757. Meanwhile, older models like Whatsminer M30S+ find it difficult to operate around $85,000.

The scale of technological evolution is astonishing. From the Ant S9 (28nm chip, energy efficiency 100J/TH) in 2016 to the S21 XP (5nm chip, energy efficiency 15J/TH) in 2024, electricity efficiency has improved nearly 7-fold over eight years. This leap is comparable to the transition from steam engines to magnetic levitation.

According to analysis from the Cambridge Centre for Alternative Finance, if the S21 series accounts for 20% of the network’s total hash rate, the core of the shutdown price could decrease by 40%.

Morgan Stanley analysts evaluate this process even more critically. They suggest that improvements in mining machine efficiency will reshape the cost curve of Bitcoin, potentially reducing the fluctuation range of shutdown prices from “tens of thousands of dollars to a few thousand dollars.” Simultaneously, large-scale mining farms, through futures hedging and access to cheap electricity, are further reducing sensitivity to shutdown prices.

Balancing Electricity Costs and Hash Rate: The Future of Shutdown Price

The market is divided into two camps regarding the effectiveness of shutdown prices.

The “Decline Theory” camp argues that the pace of mining machine upgrades surpasses price fluctuations, gradually eroding the anchoring effect of shutdown prices. Moreover, the rapid growth of Bitcoin spot ETFs weakens the correlation between miners’ selling pressure and prices.

Conversely, the “Evolutionary Theory” camp holds a different view. Chip manufacturing technology is approaching physical limits (around 1nm), and the pace of improving electricity efficiency will inevitably slow down. Additionally, global policies for carbon neutrality are increasing electricity prices worldwide, offsetting some benefits of technological progress.

Data from CoinMetrics shows a complex reality. The Bitcoin mining machine market reached $5 billion in 2023, a 25% increase year-over-year, but electricity costs have risen by 15% over the past five years.

Regardless of which faction prevails, shutdown prices are quietly changing. The volatility range is narrowing, recovery cycles are shortening from months to weeks, and a new era is emerging where “super miners” equipped with next-generation machines and low-cost electricity lead the market.

The Possibility of Rebound and Uncertainty

So, can Bitcoin still rebound based on shutdown prices? Given the current price of $89.09K, the answer remains uncertain.

If prices fall further, new machines like Ant S21 XP may maintain their footing. Large-scale shutdowns of older machines could reduce selling pressure and attract market entry funds, potentially triggering small rebounds.

However, if prices stay at high levels around $80,000–$90,000, the traditional trigger effect of shutdown prices will gradually diminish, and Bitcoin’s price movements will depend more on macroeconomic factors and sentiment.

Arthur Hayes, founder of BitMEX, pointed out, “The expectation that shutdown prices will save the market is a thing of the past. Future fluctuations will be driven by external capital battles.”

Marc Thielen, founder of 10x Research, emphasized that this level is an important support zone by analyzing the actual purchase prices of short-term holders (average cost of addresses holding less than 155 days, currently about $82,000). Historically, in bullish markets, this line is rarely broken for long, but in bearish markets, it may face prolonged pressure.

The economics of mining and electricity costs form the most fundamental playing field of the crypto asset market. Technological evolution advances relentlessly, and electricity costs are always in flux. While shutdown prices remain a market indicator, they are gradually losing their grip. The future trajectory of Bitcoin is no longer determined solely by mining profitability but increasingly influenced by macroeconomic factors, regulatory environments, and the dynamics of global capital flows.