Sam Doctor is chief strategist at BitOoda, an institutional focused agency brokerage that is fully regulated by the SEC and CFTC. BitOoda in partnership with Fidelity recently published an in-depth analysis on the state of bitcoin mining. They spoke with more than five-dozen miners and several mining rig manufacturers, distributors and sellers in more than 150 locations across nearly two-dozen countries.

Doctor discussed the median cost to mine BTC.

“What we did was identify our price for about 40% of the total network. And so based on that, sort of extrapolating from there, we estimated what the median price would be for the whole network. Our price appears to be about a 3 cent median. The range is from under a cent in some geographies and goes all the way to about 8-9 cents. The median is about 3 cents. So at that price, the median price to mine a bitcoin works out to roughly about $5,000…I think that China seems to be one of the lowest cost jurisdictions. We certainly spoke with several Chinese miners, but we have less information about China than we do for some of the other countries.”

The hashrate recently reached an all-time high despite the fact that the Bitcoin halving took place just a few short months ago. Doctor explained,

“There are probably several different factors that play in. The first is the lower price power that you see in China particularly with the hydroseason, and I think there might have been some migration of capacity from slightly higher power prices to lower power prices.

What that meant is that older generation rigs like S9 which were temporarily non-profitable returned to profitability with both the fallen hashrate initially and the lower power price….The other factors that I would say is there are a number of mining rigs that have been paid for months ago. And as you probably know, mining rigs can sometimes take three to six months delivery time from the time you pay for them.

So once you receive them, and especially if they’re newer generation rigs that are more profitable than old generation rigs, you’re going to turn them on. And you know, when you turn them on, the other thing to remember is, you could turn off two old S9 rigs which generate about 28 terahashes and replace that with an S19 rig, which generates 110 terahashes. So even though power consumption is increasing, the hashrate could effectively triple or almost quadruple — with nothing else changing, just simply getting a new rig.”

Teana asked Doctor what scale of funding will be required to support growth for miners.

“We sort of think about this as how far can the hashrate go, and what would it take to get there. We think that hashrate is now about 135 exahashes could get to about 260 in about a year and 360 in two years. And to get there, it requires over $6 billion of capital investment and I think most of that, probably roughly about $4 billion of that would need to be external funding. That of course is a function of price. If bitcoin went to $20,000, you don’t need as much external funding because you’re making more money yourself,” said Doctor.