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The battered Bitcoin miners saw it go out

Bitcoin miners hit hard by the cryptocurrency accident could throw in the towel.

The hash rate of the Bitcoin network, a way to measure the computing power dedicated to digital currency mining, dropped by around 24% from the all-time high at the end of August to November 24, according to Blockchain.com.

While the decline may be partly due to the passage of miners to other cryptocurrencies, JPMorgan Chase & Co. says that some in the sector are losing money after the price of Bitcoin has plummeted.

"This suggests that prices have fallen to a point where the mining sector is becoming uneconomic for some," wrote JPMorgan strategists led by Nikolaos Panigirtzoglou in a November 23 report, referring to the falling hash rate.

The Bitcoin miners, who perform the necessary calculations to confirm transactions in the cryptocurrency, are rewarded for their efforts with Bitcoin. If prices fall sustainably below miners' break-even costs (determined by their electricity bills, mining efficiency and other factors), they may be forced to close to avoid operating at a loss.

The break-even cost to extract a single Bitcoin using Bitmain's Antminer S9 facility was estimated at $ 7,000 in a Fundstrat Global Advisors report on November 16, although the level is probably lower for some miners with access to electricity and low-cost equipment. Bitcoin, which lost about 80% from its December peak, traded at $ 3,912 at 5:35 am on Monday in New York.

A big loss of minerals could be bad news for chip makers, including Taiwan Semiconductor Manufacturing Co and Nvidia Corp which supply the industry, along with designers of mining platforms like Bitmain Technologies Ltd who are pursuing initial public bids.

Yet, there is a silver coating for miners who survive the price drop, notes Ryan Rabaglia, Hong Kong's chief merchant at OSL, a cryptocurrency company. When the weaker hands leave the Bitcoin network, the difficulty of extracting the cryptocurrency decreases. A killing could ultimately benefit the survivors, assuming that the price of Bitcoin does not fall too quickly.


Read: Bitcoin is down 75% in 2018 while it closes on $ 3,500

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