Bitcoin mining has taken a real hit over the past month. Thanks to the coronavirus pandemic, the mining sector has experienced a huge fall in activity due to a bitcoin selloff and lagging rewards.
Bitcoin Mining in Serious Trouble
Many bitcoin mining firms are now looking at the situation differently. They figure they can still make a profit granted they work with people’s present situations. Thus, several are looking to sell bitcoin mining equipment at a discount. This way, they can earn revenue will giving the mining sector the push it needs.
Many firms have reported huge losses over the past few weeks. For example, Digital Farms in California announced recently that it would be closing its doors indefinitely until the present economic conditions blow over. Bitcoin mining is considered a non-essential operation during these times, and thus Digital Farms has taken it upon itself to shut down until further notice.
In addition, Riot Blockchain has also explained that the coronavirus has caused its business to suffer. It is presently looking to revamp and refigure its operations to better serve its customers and potentially stay in business during this time.
Some examples of major sale prices include those of the WhatsMiner M30s through DJ Miner. Originally, the company was advertising these products at approximately $2,500 each, though now buyers can purchase them for roughly $2,000 even, thereby marking a 20 percent price reduction.
In addition, companies like Bitmain – a China-based provider of Ant Miner machines – is advertising these products at about $1,300 – $200 off their original prices.
In a statement, Token Insight analyst Johnson Xu explained:
ASIC miners have experienced a relatively large market devaluation since Q4 2019. However, the miner market has found some level of price floor during Q1 2020 despite the recent crypto market downturn. Some experienced miners are currently looking to purchase some secondhand ASICs at a significant discount… based on their carefully structured model.
All this sounds fine and dandy, but it’s not just lowered prices that bitcoin mining firms need to worry about. The hash rate has also taken a dive, and bitcoin computing power has been weakened, though Blockware Solutions – a company that resells ASIC miners – explained this could help improve efficiency in the long run.
Stay Tough and You’ll Survive
If bitcoin remains at lower price levels for two to four months, post-halving, many miners operating at a loss will be forced to shut off. After all the miners that are operating at a loss shut off, the miners that survive experience significant margin relief. We will witness a network in short-term chaos, but difficulty adjustments will reinstate stability once the inefficient miners shut off.
In other words, the market will come down to a fight between those who are experienced and powerful enough to stay plugged in and those who aren’t.
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