Cryptoverse: Bitcoin miners get stuck in a bear hole

Cryptoverse: Bitcoin miners get stuck in a bear hole

Sept 27 (Reuters) – Don’t think about the embattled Bitcoin miner.

In late 2021, miners are the city’s elites with a sure path to profit: connecting powerful computers to cheap power, solving fiercely complex mathematical puzzles, and then selling freshly minted coins into the booming market.

A long year in coding.

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Global revenue from bitcoin mining has fallen to $17.2 million a day amid the crypto winter and the global energy crisis, down nearly 72% from last November when miners were raking in $62 million a day, according to data from Blockchain.com.

“Bitcoin miners have continued to watch margins plummet — the price of bitcoin has fallen, mining difficulty has gone up and energy prices have gone up,” said Joe Burnett, chief analyst at Blockware Solutions.

This puts serious pressure on some players who have purchased expensive mining machines, or rigs, who are relying on rising bitcoin prices to recoup their investment.

Bitcoin is trading at around $19,000 and has failed to cross $25,000 since August, not to mention regaining its November high at $69,000.

At the same time, the process of solving mining puzzles is becoming more and more difficult as more miners come online. This means that they have to gobble up more computing power, which leads to increased operating costs, especially for those without long-term power pricing agreements.

Bitcoin miners’ profit for one terahash per second of computing power has fluctuated between $0.119 and $0.070 per day since July, down from $0.45 in November last year and around two-year lows.

The dismal state could be here to stay as well: The Luxor Hashrate index, which measures mining revenue potential, is down nearly 70% this year so far.

A representation of bitcoin is seen in an illustrative photo taken at La Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier
Reuters graphics

2140: Last Bitcoin

It was a pain for the miners.

digital marathon stock (Marao)Blockchain riot (RIOT.O) The Valkyrie Bitcoin Miners ETF (WGMI.O) It has sank more than 60% this year, for example, while crypto mining data center operator Compute North filed for bankruptcy last week.

However, mining is ultimately a long-term proposition – the last bitcoin is expected to be mined in 2140, more than a century away – and some spying opportunities are in the dark.

Said William Szamosszegi, CEO of Sazmining Inc that plans to open a renewable energy-powered Bitcoin mining operation.

In fact, many miners are cutting back on the purchase of excavators, forcing manufacturers to lower prices.

For example, the popular S19J Pro rig sold for $10,100 in January on average, but is now selling for $3,200, analysts in Luxor said, also noting that the large order prices of some miners have fallen by 10% in the past week. Just.

Chris Klein, co-founder of crypto investment platform Bitcoin IRA, said miners should be “hyper-focused” on energy efficiency, to cut costs and avoid any fallout from climate change regulations.

“From managing their balance sheet, processing units and energy costs, miners will look to stay afloat regardless of current market conditions,” he added.

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Additional reporting by Lisa Pauline Matakal and Medha Singh in Bengaluru; Editing by Tom Wilson and Praveen Shar

Our criteria: Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed under the Trust Principles to impartiality, independence, and freedom from bias.

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