The miners look gloomy – With a painfully maintained waterline around 20,000$ Bitcoin no longer just undermines investor morale, it also invests miner morale (got it?). But, if not a week now goes by without seeing a bitcoin miner get rid of your harvestit should be remembered that this is more, for the time being, industrial pragmatism than any form of pessimism for the future.
Bitcoin miners face major problems
Not a day now seems to go by without one or another bitcoin miner agreeing, coerced and coerced, to part with some of their hard-extracted digital gold hoard in the sweat and heat of his ASICs.
It is thus today the turn of Core Scientific to announce that it has relieved itself in recent weeks of more than 7000 BTC, for a total of 167 million dollars and an average sale price of $23,000 per corner.
The study of the company’s balance sheet thus highlights a sharp reduction in its own reserves, falling from 75% reported to 8058 BTC held in cash at the end of May-2020.
Core Scientific therefore holds, at the time of writing, 1959 BTC and $132 million in cash. A situation far from filing for bankruptcy therefore, when we recall that with its substantial industrial resources, the flagship of the texan bitcoin mining industry produces more than 1,100 bitcoins on average per month (about $20 million at the current price).
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Bitcoin: Minefield for miners
If everyone has the “HODL! » easily on the lips in these turbulent times (any sale willingly passing in the eyes of the community for an act of weakness, even cowardice, in view of a future often described as glorious for Bitcoin), it will be recalled that professional BTC miners n care about ideological positions (or at least deal with them in a larger equation).
Indeed, as good industrialists educated in the school of pragmatism, these actors are essentially concerned with profitability, even pure and simple survival in these troubled economic times.
However, if the prices of Bitcoin fluctuate, at the rate of the market, but also of the difficulty of mining which animates its decentralized network, bank drafts, rents and other electricity bills retain the annoying habit of being regular and rather on the rise in an economic environment itself hit by inflation and who doesn’t care about the level of difficulty of the hashrate.
Current events in the sector therefore currently see a succession of gloomy litany of mining actors offloading their precious cargo for such trivial reasons as paying local refuse collection taxes or keeping the lights on until the end of the month. Evoking a “profitability wall” (a situation where the equation cost of equipment and energy vs price of bitcoin becomes unfavorable for miners), the company Compass Mining hisyou thus echoed at the beginning of June of these systemic difficulties encountered by bitcoin miners, forced to sell their production on the free market. A massive sale, fueling the passage of as much the decline in prices and feeding the vicious circle of the decline.
This is a good opportunity to recall in passing the break-even points by category of miners, this reminder demonstrating that, apart from the latest war machines, any minor with more than 2 years of seniority is currently underwater, or about to be (and we are not talking about watercooling).
Should we deduce that – as the mainstream press likes to point out at such a time in the crypto cycle – Bitcoin and its mining would be “dead” and that the whole industry “goes to 0”? Of course not, and the boss of Core Scientific thus indicates that the massive sale in June has above all enabled his company to “pay ASIC servers, plan debt repayments and invest in additional data center capacity”.
And more fundamentally, the interested party emphasizes that this kind of downsizing makes it possible to strengthen and clean up the position of society, and prepare for the (hoped-for) bright future:
“Our industry is under tremendous stress as financial markets have weakened, interest rates are rising and the economy faces historic inflation. Our business has successfully weathered downturns in the past, and we are confident in our ability to navigate the current market turmoil. »
Mike Levitt, CEO of Core Scientific
The future is not written in advance and nothing is certain, but it is reasonable to think that tomorrow, in one year as in ten, the mining of bitcoin will continue to rhythm the life and the growth of the the most resilient decentralized network in the world. The industrial and economic hazards of bitcoin mining players must therefore be put into perspective, in the same way that they should also be put into perspective when, during the next bullish phase, everyone suddenly improvises as a professional and seasoned miner. digital gold.
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