Bitcoin prices falling below the 20000$ mark is quite a tragedy for the whole crypto industry. 😬 A coin, that is fundamental for all the market dumping is a clear indication of the worst bear market, we have ever experienced. It’s also the first bear market that had Bitcoin depreciate more than the previous cycle’s minimum was. Miners are those who feel depreciation more than others.
Some miners have already capitulated, but most big players are now trading their Bitcoins on exchanges - one fifth the overall hashrate consists of such traders. However, if the rates continue decreasing, public companies will start selling their coins rapidly. 📉
Why is everyone so worried?
It isn’t just about the price, but also about the profits. Mining requires investing into the equipment, and even though ASIC went down in price as well, profits are still lower compared to investment requirements. A price you would pay for one terra-hash is now sitting at about 60$ mark.
However, the current hash price is two times lower than it was 1.5 years before and is said to be 0.09$.
If we do our math, we can find out that the profitability has decreased by nearly 2X. 😨
Thus, making less people interested in mining and increasing the complicity of it. That continues the tragedy cycle and results in higher requirements due to less net participants.
Public miners are now being stirred by three major problems.
- Bitcoin rate decrease ➡️ Mining profitability decrease
- Mining profitability decrease ➡️ Mining net members decrease
- Mining net members decrease ➡️ Mining complicity increase
- Mining complicity increase ➡️ Investment requirements increase
All that results in the main problem - an 80% money flow decrease in mining and the situation doesn’t seem to improve any time soon. 👎
Who is going to survive?
Even though that hurts to say, the era of private mining is coming to its end. An individual will also have to pay electricity bills, while also having to maintain the equipment and with current hashrate the chances of losing money are higher than the chances of earning.
The only players who might have a chance of surviving in the current situation are public miners, but even those can struggle. Here is an infographic for comparing the direct Bitcoin production cost of different public miners ⬇️
Stronghold is leading the race with only 3648$ required for producing Bitcoin. All that is due to their own energy stations that recycle used coal to produce energy for mining - a clear example for the “Work smarter, not harder” statement. 😎
Whereas, Bitfarms’ Bitcoin production price is twice the previous one, because the company has no access to cheap energy. 🤷♂️
We don’t think many miners are reading our articles, but if there are any we really do wish you all the best - we live in a very hard time for mining.
Stay tuned and don’t lose faith ✊
FAQ: What is hashrate?
Hashrate is a measure, indicating the amount of computing power required for the net to execute an operation.