Hundreds of thousands of bitcoin miners hit checkmate
Last year, miners had to buy cryptocurrency miners, and manufacturers didn’t deliver orders on time. And now everything has completely changed. Matt Schultz, president of bitcoin mining company CleanSpark (CLSK), said the company still has 250,000 to 500,000 unregistered miners. Meanwhile, Ethan Vera, CEO of service company Luxor Technologies, revealed that they still have 276,000 miners as of September.
consequences mint leaves, whatever the exact numbers are, it is clear that cryptocurrency mining is no longer as profitable as it should be. Bitcoin mining company Compute North filed for bankruptcy last month.
Many bitcoin miners are still in the box. Colour: mint leaves
Experts say that due to the collapse of the cryptocurrency market, miners have stopped investing heavily in equipment. In addition, the operating costs of excavators are increasing due to rising energy prices. Bitcoin mining difficulties are constantly reaching all-time highs, causing rewards to drop significantly. Some miners say there’s still plenty of room in the services space, but the cost is too high, making investors unwilling to take the risk. Vera, from Luxor, said since China banned bitcoin mining and miners flocked to the US and Kazakhstan, buffalo plow rental services have grown significantly.
Mike Levitt, CEO of mining company Core Scientific, stated that Bitcoin miner rental fees have increased by 25% over the past few months. In the cryptocurrency mining space, rental mining services are very popular. Site providers can mine bitcoin for low fees by creating a standard mining area. It is enough for a miner with money to buy a graphics card, a special excavator, and then send it here without renting a place, having built the necessary infrastructure. Mining workshop rental fees change from time to time and are highly dependent on electricity prices.
Rising energy prices in general and electricity prices in particular have made service providers unprofitable. Some tried to raise prices, others even went bankrupt because they couldn’t afford the expense. Diggers also find it difficult to find a cheap place to send their buffalo to plow.
Alex Martini, CEO of New York-based mining company Blockfusion USA, said: “We were half empty, but customers didn’t care because the price for the service was too high. I will loose. The market is bad because of the price. Bitcoin is too cheap and the price of electricity is high.”
According to Martini, miners keep the hardware even if it doesn’t work and see it as an investment. If the price of bitcoin goes up, this platform can increase its price. Meanwhile, some hardware manufacturers are trying to lower the price of new devices. At the end of August, Bitmain, the world’s largest producer of cryptocurrency miners, launched a 30 percent promotion for customers. Some large miners such as CleanSpark, Core Scientific and Marathon require hardware partners to offer discounts on contract delivery.
As the cryptocurrency craze grows, miners have to queue to buy machines. You usually pay a deposit and pay the rest when you pick up the car. Some large contracts add a “price hedging clause” when the market is volatile. In the event of a market collapse, Bitmain will lower the miner price, the specific discount rate will be based on an analysis of the overall situation.
Two other major miners, MicroBT and Canaan, could not be reached for comment. However, some analysts predict that due to the negative impact on the market, demand for hardware will be huge and many cryptocurrency miners may have to cancel orders. The extent of the crash will depend on the future bitcoin price.
Huong Nha (Track mint leaves)