Bitcoin miners have learned by heart that Bitcoin mining is still a Wild West after the price of Bitcoin has shrunk to a new 13-month low last week. According to data from CoinMarketCap, the price of Bitcoin is now under $ 4,300, far from its peak value of nearly $ 20,000 in December last year.
The entire cryptographic market lost over $ 600 billion from the January peak of over $ 800 billion. As the cryptography market continues to plummet, some Bitcoin miners are forced to close down their businesses, as Bitcoin mining is no longer profitable for them.
The falling price of Bitcoin and its effect on miners
Bitcoin has been in correction mode since the beginning of the year, but has managed to maintain the resistance level of $ 6,000 until its price has fallen by almost 30% and has fallen below $ 4,500. .
The latest price developments have left cryptographic miners – entities that use enormous computing power to solve mathematical puzzles that are very difficult to beat new currencies – in a dangerous position. Miners are rewarded with coins that sell for profit.
It has become useless for mining entities to use at least four models of Bitcoin mining platforms if they use energy at a rate of $ 0.06 per kilowatt hour (kWh), the South China Morning Post reported on November 22nd.
Cryptocurrency has gone from being an individual to a massive industry with big companies ready to invest millions of dollars before they can see any return on their capital. To overcome this problem, miners combine their computing power to get a better chance to solve the mathematical puzzle and get Bitcoins in return. This gave rise to the so-called Bitcoin mineral pools.
Bitmain, Canaan and Ebang International are all major Chinese players in the crypto mining sector. Each of them had separate plans to present for an IPO (Initial Public Offering) at the Hong Kong Stock Exchange. However, their perspectives no longer seem so brilliant. Canaan allowed his six month IPO application to expire last week.
The South China Morning Post reported that a group of anonymous Chinese Bitcoin miners has already closed 20,000 mining drilling rigs. However, this recession could become an opportunity for other mining operators operating in countries like Russia and Venezuela where electricity is cheaper.
Bitcoin Cash Fork has brought down the market?
Bitcoin's price is moving in a different direction than what analysts had predicted at the beginning of the year, with many of them claiming that the price of Bitcoin would reach $ 25,000 or more. Some continued to adjust their predictions based on the situation on the ground.
Bitcoin showed a sign of maturity when it remained relatively stable while stock markets plunged into massive sales.
It seems that the current round of price cuts has been triggered by the Bitcoin Cash fork wars between Roger Ver, who has the support of Bitmain, Coinbase and Binance among others and Craig Wright, who previously claimed to be Satoshi Nakamoto and has the support of some encrypted news sources.