October CPI Report Nov 10: A Hot Print Could Hit Miner Margins

The October CPI report comes out on Tuesday, November 10, at 8:30 a.m. Eastern, according to the BLS release schedule. A hot number would make a December rate hike more likely, and that tends to hit bitcoin. For miners, the maths is direct. For example, if bitcoin fell 10%, an S19k Pro’s break-even would drop from 6.0 to 5.4 cents per kilowatt-hour.

Where inflation stands before the October CPI report

To start, September’s report was hot. Prices rose 3.7% over the year and 0.6% in the month, per the BLS. Core prices, without food and energy, rose 2.6%. Nexo’s market note says forecasts had been 3.6% and 2.5%, so both came in above forecast. In response, bitcoin slid to about $82,700 as the numbers came out, according to Nexo, and Coingape also reported the drop.

Where the Fed stands

On October 28 the Fed held its rate at 3.75% to 4%. The vote was 10 to 2. However, Lisa Cook and Beth Hammack wanted a quarter-point hike, per CNBC and Admiral Markets. In addition, CNBC says futures show a strong chance of a hike at the next meeting. That next meeting is December 8-9, per the Federal Reserve calendar. Earlier, on October 14, Nexo cited CME pricing of about 95% for a hike by December.

In short, the hike is mostly priced in. Therefore, the surprise matters more than the number. A print above forecast could add to the hike case. On the other hand, a soft one could take some pressure off.

Miner math before the October CPI report

Here is the live maths on November 1. Bitcoin is $77,683 and the network is 1068 EH/s, so hashprice is about $32.89 per petahash per day. That is what one PH/s of hashing earns before power.

Numbers are profit per day after electricity, at the three power prices shown. Break-even is the most you can pay per kilowatt-hour before the machine loses money. Specs are the manufacturer ratings; network data comes from mempool.space. Try your own power price in our free bitcoin mining profit calculator. Want to run the same numbers on a machine you can buy today? See our used ASIC miners, or buy several at once through bulk lots.

What a hot or soft print would change for miners

To be clear, these are what-ifs, not forecasts. We do not know which way the number goes. Still, it helps to know your exposure before 8:30 a.m. on the day.

If a hot print knocks bitcoin down 5%: the break-even power price on an S19k Pro falls from 6.0 to 5.7 cents per kilowatt-hour. At 8 cents, daily profit goes from -$1.30 to -$1.49.

If it knocks bitcoin down 10%: the break-even power price on an S19k Pro falls from 6.0 to 5.4 cents per kilowatt-hour. At 8 cents, daily profit goes from -$1.30 to -$1.67.

If a soft print lifts bitcoin 5%: the break-even power price on an S19k Pro rises from 6.0 to 6.3 cents per kilowatt-hour. At 8 cents, daily profit goes from -$1.30 to -$1.11.

Next, look at the chart. At 8 cents, the S21 Pro makes $0.96 a day today. However, after a 10% drop that becomes $0.19. Meanwhile, the older machines are already under water at that rate, so a drop only makes the hole deeper. On the other hand, hashrate does not react to CPI in a day. The price moves first, and then miners switch off later, if at all.

What we would watch

First, the monthly core number, since that is what the Fed watches most. Second, how bitcoin trades in the first hour. Third, whether the move holds into the end of the week. Also, the October jobs report lands before it, on Friday, November 6, and producer prices follow on November 13, both per the BLS schedule.

Our Bitcoin price prediction updates every day. For the miner side, our bitcoin mining profitability today page reruns the table above daily. If you are weighing a purchase, our mining economics guides show the payback maths.

-Nick
ING Mining

This is general information, not financial advice. Crypto is volatile, and you can lose money. Please do your own research.