Značka: Bitcoin Mining

Crypto and Capitulation — Is there a silver lining? Watch Market Talks on Cointelegraph

On this week’s episode of Market Talks, Cointelegraph welcomes Magdalena Gronowska, co-founder of Citadel 256 and senior consultant at MetaMesh — a blockchain consultancy and building platform.This week, we take a deep dive into everything that is happening in the crypto space — we get Gronowska’s professional take on Sam Bankman-Fried and the whole FTX saga and also BlockFi’s bankruptcy. Bitcoin (BTC) miners have also had a rough few months with profits slowly dipping. What are the odds of most miners shutting down shop and selling their Bitcoin while still making some profit on it, especially since most of them are currently struggling to manage their debt? How will this impact the rest of the market?During the bull market, there were a lot of synergies formed between energy and Bitcoin mining companies. Has this current extended crypto winter impacted those plans and relationships? We ask Gronowska for her valuable insights into this, as she has had years of experience in the industry and was also the co-founder of Citadel 256, an enterprise-scale Bitcoin mining company.In light of all the recent negative stories coming out of the crypto industry, from Terra to FTX and collapsing exchanges, how far back has this pushed mass adoption and institutional investors? Has the confidence in the industry been forever broken? Crypto advocates, for the longest time, have advocated for less or no regulation and been anti-authority and pro-privacy, but in light of recent events, many have come to understand the need for regulations and a certain amount of government oversight. But how much is too much or too little regulation, and what kind of regulations would best benefit crypto investors and also encourage a growing and robust market? Make sure to stay tuned until the end to get all the answers and more. We’ll also be taking your questions and comments throughout the show, so be sure to have them ready to go.Market Talks streams live every Thursday at 12:00 pm ET (5:00 pm UTC). Each week, we feature interviews with some of the most influential and inspiring people from the crypto and blockchain industry. So, be sure to head on over to Cointelegraph’s YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.

Čítaj viac

Bitcoin capitulations abound — Data shows realized and unrealized losses at record-highs

Being three weeks removed from the FTX collapse, Bitcoin (BTC) analysts are combing through data to decipher whether more selling will continue or if a bear market floor has been reached. One thing miners, short-term and long-term holders have in common is they are losing in the Bitcoin market right now. According to on-chain analysis from Glassnode, the scale of both realized and unrealized losses amongst Bitcoin holders is one of the heaviest capitulation events in BTC’s history. Capitulation is hindering all groups from the increasing number of bankruptcies and dwindling miner revenue. Bitcoin’s realized losses fourth largest on record while unrealized losses increaseNovember recorded $10.8 billion in 7-day realized losses for Bitcoin. The largest recorded realized loss in Bitcoin’s history is June 2022 when $19.8 billion was recorded. Such losses show that a large volume of Bitcoin has changed hands at discounted prices.Bitcoin realized 7-day losses. Source: GlassnodeA popular crypto investing saying is “you cannot lose if you do not sell.” Unrealized losses track the entire Bitcoin market versus total market capitalization. The November 2022 56% unrealized loss is the largest in the current bear market. In 2014-2015, unrealized losses hit an all-time high for Bitcoin holders at 86%. The current unrealized losses are the fourth largest in Bitcoin’s history.According to Glassnode analysts: “This metric has recently peaked at 56%, which is the highest for this cycle, and comparable to prior bear market floors.”Bitcoin unrealized losses 7-day moving average. Source: GlassnodeBlock times slow down as Bitcoin miners struggle Bitcoin investors are not the only group capitulating in the current market. Bitcoin miners are struggling to remain profitable with the depressed prices.There it is. Hash Ribbon miner capitulation confirmed. Triggered by the $10B FTX fraud and subsequent collapse, Bitcoin miners are now going bust and Hash Rate is trending down. pic.twitter.com/TorX7PzrNu— Charles Edwards (@caprioleio) November 28, 2022Since Bitcoin miners are under pressure to remain financially viable, this affects the BTC mining hash rate. A reduction in Bitcoin’s hash rate slows down BTC transactions. According to HashRate Index, block times reached over 11 minutes. Bitcoin’s hashrate is dropping like a rock↘️Bitcoin’s 7-day average hashrate is currently 236 EH/s, a 14% decrease from its 274 EH/s ATHBlock times are sluggish as a result: 11 minutes and 12 seconds on average this epochhttps://t.co/JN7OmpJ8X0 pic.twitter.com/ckxqEqOGqX— Hashrate Index (@hashrateindex) November 28, 2022

Despite the current challenges, analysts believe that capitulation is healthy for starting the next bull run. Glassnode notes:“One consistent event which motivates the transition from a bear back towards a bull market is the dramatic realization of losses, as investors give up and capitulate at scale.”With so many groups currently at a loss at this stage of the bear market post-FTX collapse, Bitcoin and overall market sentiment will need to improve to spur new money to drive a bull run. Without improved sentiment, the capitulation may not match previous Bitcoin cycles. The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Čítaj viac

Bitcoin mining revenue lowest in two years, hash rate on the decline

The revenue earned by Bitcoin (BTC) miners fell to two-year lows owing to poor market performance and a heavier computational demand amid rising network difficulty. However, an ongoing downturn in the Bitcoin hash rate over the past month has allowed miners to recoup losses.The total Bitcoin mining revenue — block rewards and transaction fees — in U.S. dollars fell down to $11.67 million, a number last seen on Nov. 2, 2020, when Bitcoin’s trading price was around $13,500.While the current market price of around $16,500 suggests an obvious increase in mining revenue, factors including greater mining difficulty and rising energy prices contribute to lower income in dollar terms.Adding to the above, the difficulty of mining a Bitcoin block has skyrocketed to an all-time high of almost 37 trillion — forcing Bitcoin miners to spend more energy and computational power to stay competitive. However, over the past three months, the hash rate of the Bitcoin network witnessed a steady decline. The hash rate stands at 225.9 exahash per second (EH/s), which fell 28.6% from its all-time of 316,7 EH/s on Oct. 31, 2022.The hash rate is a security metric that helps protect the Bitcoin network from double-spending attacks. However, considering the grand scheme of things, temporary measures taken by the community include acquiring cheaper mining hardware and resettling in jurisdictions with low energy prices.Related: Bitcoin miners look to software to help balance the Texas gridNew York City mayor Eric Adams believes that goal to make New York a crypto hub can be combined with statewide efforts to curb environmental costs related to crypto mining.“I’m going to work with the legislators who are in support and those who have concerns, and I believe we are going to come to a great meeting place,” said Adams while revealing that the city will work with legislators to find a balance between the crypto industry development and legislative needs.

Čítaj viac

Could Hong Kong really become China’s proxy in crypto?

With its partial autonomy, the island city of Hong Kong has traditionally served as “a gate to China” — the local trade center, backed by transparent English-style common law and an openly pro-business government strategy. Could the harbor, home to seven million inhabitants, inherit this role in relation to the crypto industry, becoming a proxy for mainland China’s experiments with crypto? An impulse to such questioning was given by Arthur Hayes, the former CEO of crypto derivatives giant BitMEX in his Oct. 26 blog post. Hayes believes the Hong Kong government’s announcement about introducing a bill to regulate crypto to be a sign that China is trying to ease its way back into the market. The opinion was immediately replicated in a range of industrial and mainstream media.What happenedIn late October, the head of the fintech unit at the Securities and Futures Commission (SFC) of Hong Kong, Elizabeth Wong, announced the liberalization of Hong Kong’s regulatory landscape by allowing retail investors to “directly invest into virtual assets.” Up until recently, only individuals with a portfolio worth at least $1 million (which marks about 7% of the city’s population) have been granted access to centralized crypto exchanges by the SFC. The regulator has also been reviewing whether to allow retail investors to invest in crypto-related exchange-traded funds, Wong noted.Roughly a few days after, on Oct. 21, Hong Kong’s Secretary for Financial Services and the Treasury, Christopher Hu, shared his city’s fintech plans, among other efforts, directed at “transferring wealth to the next generation.” The key is establishing a regulatory regime for virtual asset service providers, and a certain bill was already introduced to the city’s lawmakers, as Hu specified. Finally, on Oct. 31, during the city’s FinTech Week 2022, Hong Kong Financial Secretary Paul Chan assured attendees that the digital transformation of financial services is a key priority for his team. Chan’s colleague, the CEO of the Hong Kong Monetary Authority (HKMA), Eddie Yue, promised “radical open-mindedness” regarding the innovations. According to him, the HKMA is in the process of establishing a regulatory regime for stablecoins and has already issued guidelines to banks about cryptocurrency or decentralized finance-related services.Crackdown on the Mainland, uncertainty on the islandHong Kong’s intention to open up for crypto comes a year after a devastating crackdown on the industry in Mainland China. Until 2021, the People’s Republic Of China has been enjoying a status of a world leader in hash rate and cryptocurrency mining. Starting in May 2021, Chinese regulators began prohibiting involvement in crypto for financial institutions, then mining operations and, finally, the work of exchanges and trading for individuals. Although that didn’t effectively outlaw the crypto ownership as such, any potential for institutional development of the crypto industry in the country was frozen. Back then, Hong Kong officials didn’t confirm (or deny) that the island city would comply with Beijing’s hardline policy on digital assets, but investors nevertheless started considering their options. Recent: How are ‘lite’ versions of crypto apps helping adoption?While today it may sound ironic, in 2021, relocating his headquarters to the Bahamas, Sam Bankman-Fried of FTX was highlighting the importance of long-term regulatory guidance and clarity, which Hong Kong laced in his opinion. This uncertainty took its toll indeed — after attracting $60 billion in crypto between July 2020 and June 2021, Hong Kong started to witness the largest players opening up alternative offices in the Caribbean or neighboring Singapore. FTX was joined by the likes of Crypto.com, BitMEX and Bitfinex. The Hayes narrativeMixing two plot lines — one which traces all the most important crypto innovations to China, and the other which notes Hong Kong’s historical role as the entry point to communist China — Hayes argued:“Hong Kong’s friendly reorientation towards crypto portends China reasserting itself in the crypto capital markets.” According to Hayes, Hong Kong authorities cannot diverge too far from Beijing in their decisions, so opening up the crypto market amid the crackdown in the Mainland couldn’t be an autonomous act. The reason behind Beijing’s benevolence to such a U-turn lies in the anxiety of Hong Kong losing its status as the principal Asian financial center. It has certainly faltered during the COVID-19 pandemic when the hardline lockdown policy, exercised in China and Hong Kong, caused an investment escape wave to the neighboring competitor, Singapore, which had eased its restrictions much earlier. Another major factor behind China’s possible support of Hong Kong’s crypto liberalization, according to Hayes, is the former’s problem with a giant United States dollar trade proficit. Historically, like almost any nation in the world, China has been storing dollar income in assets like U.S. Treasury bonds. But the example of Russia, whose foreign assets were blocked due to financial sanctions after an invasion of Ukraine, has worried Chinese officials. Hence, it is highly probable they would seek another type of asset in which to store their USD income. Cryptocurrencies and related financial products might be the option. Reality checkSpeaking to Cointelegraph, David Lesperance, founder of Lesperance & Associates law firm, who has been dealing with Hong Kon and China-based clients for more than 30 years, doubted the possible interest of the Chinese government in opening up to crypto:“Rather, they are interested in having complete control over their population, including those who reside in HK. This is demonstrated by such actions as social credit scoring, facial recognition, household registration, exit bans, zero COVID-19, etc.” Putting crypto aside, recent years have seen tightening political, cultural and economic control of China over Hong Kong with the national security law of 2020 sweeping the previous civil freedoms away, a change in school curricula to emphasize the Chinese history of the region and the ongoing integration of Mainland companies into the island’s juridical space. These signs of the shortening distance between the Mainland and Hong Kong might attract the attention of global regulators. As one banker said to CNN recently, “The worst scenario is that the West would treat Hong Kong as the same as the Mainland China, and then Hong Kong would suffer the kind of sanctions.”The elephant in the room is China’s central bank digital currency (CBDC) project. The rapid development of the digital yuan (also known as e-CNY) and the ban on crypto is hardly a coincidence. As Ariel Zetlin-Jones, associate professor of economics at Carnegie Mellon University’s Tepper School of Business, told Cointelegraph back in 2021, in the aftermath of the crackdown: “China clearly wants to promote the digital Yuan. Removing its competitors by banning crypto activities is one way to do this so it seems reasonable to consider this motivation as one rationale for their policies.”The digital yuan became the most actively transacted currency in a recent six-week m-Bridge pilot of cross-border payments among the digital currencies issued by central banks of China, Hong Kong, Thailand and the United Arab Emirates. As state-owned Chinese media noted after the experiment, “Hong Kong [is] poised to be a vibrant center for e-CNY’s use in international trade.”Recent: Breaking down FTX’s bankruptcy: How it differs from other Chapter 11 casesLesperance emphasized that the introduction of e-CNY and the continuing restrictions on the rest of the crypto, even when it comes to domestic miners, confirms Beijing’s drive to control the financial sphere in the first place:“Control over the financial lives and assets of the Chinese citizens is the ultimate control. This will be achieved when all transactions are done in e-yuan. Facilitating other crypto-currencies would undermine this move toward complete control.”

Čítaj viac

Australian firm raises $28M to expand Bitcoin mining capabilities

The turbulent climate of the crypto industry is not putting a full stop to builders in the space. Arkon Energy, an Australian renewable data center infrastructure company, recently raised millions to expand its Bitcoin (BTC) mining operations and acquired another European-based data center. The funding round was completed with $28 million raised by the data center infrastructure company, which uses 100% renewable electricity to mine BTC. Arkon extracts renewable power trapped in electricity markets to sustainably lowers its costs. Arkon CEO Josh Payne said this type of market creates the perfect storm for growth due to many factors: “The current market climate, with low prices for Bitcoin and mining equipment, offers a compelling opportunity to take advantage of our unique profitability and access to growth capital.”In addition, Arkon acquired one of Norway’s leading renewable energy-based data centers Hydrokraft AS, as a part of a larger plan to create a “vertically integrated green Bitcoin mining platform.”However, on Oct. 6, the Norwegian government recently proposed to eliminate the reduced electricity tax which is available for BTC miners in the country. The country’s finance minister said the power market is in a completely different situation now compared to when it first initiated the tax break in 2016. Similarly, in the Canadian province of Quebec, the energy manager for the region asked the local government to cut power from crypto miners due to high energy demands. Related: Bitcoin miners rethink business strategies to survive long-termThe current market downturn and industry turmoil has created a rough environment for many companies in the space to thrive. One recent example is that the BTC miner Iris Energy, is now facing a default claim worth $103 million from creditors in the United States. A filing with the U.S. Securities and Exchange Commission on Nov. 7 alleged that the company failed in restructuring to meet payment deadlines. The Hashrate Index recently released its Q3 mining report which revealed low hash prices, along with soaring energy costs made the quarter particularly rough for the mining industry. After BTC dropped below $20,000 this past September, hash rates climbed to a new all time high on Oct. 3.Amid the doom and gloom, some companies are pushing forward. The Chinese BTC miner Canaan, recently announced plans to scale its operations globally and include new research and development projects.

Čítaj viac

Hive Blockchain revenue declines by 44% Y/Y despite overall mining production surge

According to its second-quarter (ending Sept. 30) earnings presentation released on Nov. 15, Vancouver-based digital assets mining company Hive Blockchain’s revenue declined by 44% year over year to $29.6 million. During the same period, the company’s net income also decreased from $59.8 million in the prior year’s quarter to a loss of $37 million. Hive Blockchain’s net income was notably higher than its revenue in Q2 2022, as the company also recognized over $22 million worth of gains on the Bitcoin (BTC) and Ether (ETH) it mined. Although the company did not suffer material capital losses on coins in Q2 2023, it did, however, record a $26.2 million impairment expense to its mining rigs.The company’s losses appear to have intensified even though its Bitcoin mining capabilities have further scaled. Year over year, Hive Blockchain mined 31% more BTC than in Q2 2022 for a total of 858 coins, which still has more value after accounting for a 15.9% year-over-year decline in its ETH mining, which amounted to 7,309 coins in the quarter.The overall production increase was attributed to the opening of the firm’s New Brunswick Bitcoin mining facility over the past 12 months, which brought over 17,300 application-specific integrated circuit (ASIC) miners online. Expressing his optimism about the company’s operations, executive chairman Frank Holmes commented:“Strategically, we have not borrowed expensive debt against our mining equipment or pledged our Bitcoins for costly loans, thus our balance sheet remains healthy to weather this storm. We believe our low coupon fixed debt; attractive green renewable energy prices and high performing energy efficient ASIC chips will help us navigate through this crypto winter.”However, the company has warned of higher operating expenses going forward due to record-high mining difficulty. Currently, Hive Blockchain encompasses approximately 0.85% of the Bitcoin network’s hash rate. At the quarter’s end, Hive Blockchain reported holding 1,116 BTC, worth $48.4 million, and 25,154 ETH, worth $74.7 million, on its balance sheet.

Čítaj viac

FTX collapse followed by an uptick in stablecoin inflows and DEX activity

On-chain data from Glassnode show Bitcoin’s (BTC) movements hit a new record for the largest net decline in aggregate BTC balances on exchanges, reducing by 72,900 BTC in one week. A similar movement occurred in April 2020, November 2020 and June 2022 with the current outflow leaving around 2.25 million BTC on exchanges. Bitcoin exchange balances with net position change line. Source: GlassnodeExchange exodus for Ether, but not stablecoinsWhile Ether (ETH) did not see an all-time high outflow from exchanges, 1.1 million Ether were withdrawn from exchanges over the last week. According to Glassnode, this marks the largest 30-day exchange balance decline since September 2020 during the DeFi summer in the same year. Ether exchange net position change. Source: GlassnodeRelated: Exchange outflows hit historic highs as Bitcoin investors self-custodyContrary to Bitcoin and Ether’s declining balances on exchanges, stablecoins balances remain net positive on exchanges, meaning their balances are growing. Over $1.04 billion in USDT, USDC, BUSD and DAI moved to exchanges on Nov. 10. This marks Nov. 10 as the seventh largest stablecoin inflow to exchanges. Stablecoins exchange net volume. Source: GlassnodeAccording to Glassnode, with the major influx of stablecoins to exchanges, the current $41.186 billion total is an all-time high. Stablecoins on exchanges. Source: GlassnodeBitcoin miners continue to sell Bitcoin miners continue to remain under extreme pressure and data highlights that hash prices are at all-time lows. The record-low hash prices led to miners selling around 9.5% of their treasuries which is around 7.76 million BTC. This sell-off marks the sharpest monthly decline for miner balances since September 2018. Bitcoin miner balances. Source: GlassnodeDecentralized and centralized altcoin performanceUtilizing asset basked to analyze performance between decentralized exchange (DEX) and centralized exchange (CEX) tokens, Delphi digital found that when comparing the basket prices to BTC, the DEX basket had gained 24% whereas the CEX basket is down 2%. CEX and DEX basket performance. Source: Delphi DigitalGenerally, the on-chain activity correlates to overall Bitcoin, Ether and altcoin market sentiment with the current FTX chaos catalyzing historic exchange outflows and CEX tokens’ underperformance. A likely trend to emerge from the current chaos is a steady uptick in self-custodied cryptocurrencies and an increase in DEX use. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Čítaj viac

Bitcoin miner Canaan scales operations despite low earnings, CEO says

Chinese cryptocurrency mining firm Canaan will continue to expand operations despite the ongoing bear market and an associated drop in earnings, according to the company’s CEO.Canaan posted a 90% over-the-quarter decrease in net income in Q3 2022, the firm officially announced on Nov. 14. The firm’s Q3 net income amounted to 61.1 million renminbi (RMB), or $8.6 million, which is a 88% decrease from the same period in 2021, Canaan noted.The company’s revenues dropped about 41% from 1.7 million RMB ($230,000) in Q2 2022, while gross profit plummeted 75% from 940 million RMB ($130 million) posted in the previous quarter.Amid Bitcoin (BTC) mining becoming less profitable due to the crypto winter, Canaan’s mining devices have also experienced a significant decline in demand. According to the latest financials, Canaan sold a total 3.5 million terahashes per second (Th/s) of computing power in Q3, or 37% less than in the previous quarter.Despite a downward trend in its latest financial report, Canaan does not plan to slow down the company’s growth. On the contrary, Canaan continues to scale its operations across the world, including research and development projects as well as mining operations, CEO Nangeng Zhang said.“As part of our ongoing effort to strengthen our research and development capabilities, we are expanding our Singapore headquarters with promising local research and development talents to help support our business on a global scale,” Zhang noted.He also mentioned that Canaan has been expanding its mining business in the United States this year, adding:“We face a very tough industry period as the Bitcoin price is sinking to lows the market has not seen in two years. Our priority is to conserve our cash, minimize our expenses, and endure this market downturn.”Apart from scaling worldwide, Canaan has been working on new mining solutions this year. In October, Canaan officially released its new mining device series, AvalonMade 13. The new series is based on the advanced application-specific integrated circuit technology, including two models featuring 110 Thash/s and 130 Thash/s hash rates.Canaan did not immediately respond to Cointelegraph’s request for comment.Related: Bitcoin miners ‘next trigger’ for BTC price crash as outflows hit multi-month highs“The launch of the new generation product reaffirms our confidence in the fundamental value of the Bitcoin ecosystem and reflects our constant efforts in the research and development of supercomputing technology,” Zhang stated.As previously reported by Cointelegraph, Canaan posted a 117% increase in gross profit in Q2 2022 over the same period in 2021. The company still expected a deterioration in financials due to the ongoing bear market.

Čítaj viac

Argo Blockchain is at risk of closing if it fails further financing

The London Stock Exchange-listed cryptocurrency firm Argo Blockchain has warned that it’s at risk of ceasing operations due to a lack of financing.The crypto mining company Argo Blockchain continues to explore new financing opportunities after failing to raise major capital from a strategic investor, according to an announcement on Oct. 31.Argo has been seeking to raise about 24 million British pounds ($27 million) via subscription for ordinary shares. “The company no longer believes that this subscription will be consummated under the previously announced terms,” Argo said in a statement.While Argo is exploring other financing options, there can be no assurance that it will sign any definitive agreements or consummate any deals. The firm will continue to work to reach sufficient capital for at least the next 12 months from the day of the announcement, Argo noted.Argo will have to cut or event halt operations in case it fails to raise capital during this period, the firm noted, stating:“Should Argo be unsuccessful in completing any further financing, Argo would become cash flow negative in the near term and would need to curtail or cease operations.”Amid the lack of financing, Argo has been taking measures to preserve cash and optimize liquidity. The company sold 3,843 brand-new Bitmain S19J Pro miners for $5.6 million, which was the last batch of the original Bitmain order scheduled for installation in October 2022. Argo’s total hash rate capacity remained at 2.5 exahashes per second.Related: Bitcoin miners rethink business strategies to survive long-termPreviously, Argo has also been actively selling its mined Bitcoin (BTC) holdings in order to cut debt to Michael Novogratz’s crypto investment firm Galaxy Digital. In July, Argo sold another 887 BTC after previously getting rid of 637 BTC in June 2022. In doing so, Argo became one of many crypto mining firms that opted to sell self-mined BTC amid the bear market of 2022, including Bitfarms, Core Scientific and Riot Blockchain.Argo is not the only crypto mining firm that has been struggling to keep operating amid the ongoing bear market. On Oct. 26, Bitcoin miner Core Scientific filed forms with the United States Securities and Exchange Commission, warning about potential bankruptcy proceedings. The firm cited unfortunate industry events like low BTC prices, increased electricity costs and other issues.

Čítaj viac

Core Scientific reveals financial distress in SEC filing, says its end may be near

Bitcoin miner Core Scientific filed forms with the United States Securities and Exchange Commission (SEC) on Oct. 26 indicating that will not make payments due in late October and early November. The company blamed low Bitcoin prices, increased electricity costs, an increase in the global Bitcoin hash rate and litigation with the bankrupt crypto lender Celsius for the situation.The payments the company will skip would have gone to equipment and other financing and two promissory notes. Its creditors may decide to exercise remedies such as accelerating the debt or suing the company, it noted. Those actions, in turn, could result in “events of default under the Company’s other indebtedness agreements” and more creditor remedies against the company. It adds:“The Company anticipates that existing cash resources will be depleted by the end of 2022 or sooner. […] Given the uncertainty regarding the Company’s financial condition, substantial doubt exists about the Company’s ability to continue as a going concern for a reasonable period of time.”Core Scientific has engaged legal and financial advisers and is negotiating with creditors and considering restructuring its capital. It may also initiate bankruptcy proceedings, the filing warned. The company’s coffers have shrunk from 1,051 Bitcoins (BTC ) and $29.5 million in cash on Sept. 30 to 24 BTC and $26.6 million on Oct. 26. Core Scientific had holdings of 8,058 BTC as of May 31. If you wonder how Core Scientific has got here, take a look at how it managed to grow quarterly #BTC production through the spiking D/E ratio. pic.twitter.com/6o8GDNJktI— BlocksBridge Consulting (@BlocksBridge_) October 27, 2022The company has an equity line of credit with B. Riley with the right to sell up to $100,000,000 of common stock to the financial services company. It had received $20.7 million in net proceeds from the agreement as of Oct. 26.Related: B. Riley may purchase up to $100M stake in Bitcoin miner Iris EnergyCore Scientific filed papers in court on Oct. 19 claiming that Celsius had refused to pay its bills to the company since declaring Chapter 11 bankruptcy July 13. Celsius reportedly countered with a claim that Core Scientific had not fulfilled its obligations for rig deployment and power supply. Core Scientific claimed at that time that Celsius owed it $2.1 million and that it was losing $53,000 daily “to cover the postpetition increased electricity tariffs that Celsius refuses to pay.”Core Scientific also took the opportunity to inform the SEC of the appointment of Neal Goldman as the seventh member of the board of directors. Goldman will be compensated $35,000 per month for his services.

Čítaj viac

Bitcoin miners rethink business strategies to survive long-term

The Bitcoin mining industry continues to face a challenging year as the price of Bitcoin (BTC) hovers below $20,000, coupled with rising energy costs in North America and Europe. Regulators have also recently started clamping down on crypto mining, as a recent report from the Bitcoin Mining Council (BMC) found that Bitcoin has seen a 41% increase in energy consumption year-on-year (YoY). As a result, a number of crypto mining companies have been forced to sell off equipment, while others have filed for bankruptcy. Yet, this hasn’t been the case for some miners, particularly those focused on clean energy solutions and strategic approaches. For example, in September, crypto mining firm CleanSpark announced an agreement to acquire Mawson’s Bitcoin mining facility in Sandersville, Georgia, for $33 million. The crypto mining company White Rock Management also recently expanded its mining operations to Texas.Why some Bitcoin miners are thriving in a bear marketMatthew Schultz, executive chairman of CleanSpark, told Cointelegraph that he views mining as a unique way to decrease energy costs when leveraged for reasons other than making profits. According to Schultz, this perspective has differentiated CleanSpark from other crypto-mining companies. “Bitcoin mining is a potential solution for creating more opportunities for energy development,” he said. Schultz elaborated that CleanSpark partners with cities in the United States, like Georgia and Texas, to buy excess energy. For example, he noted that CleanSpark works with local areas in Georgia that receive energy from the Municipal Electric Authority of Georgia.“These cities essentially become our utility provider. They make a margin on every kilowatt hour we buy to conduct our mining operations. Yet, we are buying such high quantities of energy that it brings down energy costs for the communities we work with. We aim to impact cities posivetly by driving energy costs down,” he said.CleanSpark CEO Zach Bradford inspects a mining pod with techs at the company’s College Park Bitcoin mining campus. Source: CleanSparkSchultz also pointed out that CleanSpark formed a partnership with the energy company Lancium to support their data center in West Texas by buying excess renewable energy to create grid stability. As a result, Schultz shared that CleanSpark currently has half a billion United States dollars worth of assets on its balance sheet and less than $20 million in debt, along with support from investors like BlackRock and Vanguard. Given this, Schultz believes that the crypto bear market has impacted CleanSpark differently in comparison with other crypto miners. For instance, he noted that when one Bitcoin was worth $69,000 a year ago, many miners were discussing plans to hold BTC. “These miners also made huge commitments to companies like Bitmain for the future delivery of mining rigs,” he said. Yet, according to Schultz, CleanSpark conducted extensive analysis of the number of mining rigs being ordered last year while also looking at future energy projections. He stated:“We reached the conclusion that rather than sending a deposit for mining equipment to providers last November that are just now being delivered, we saw the possibility of an oversupply of rigs and an increase in energy costs. Therefore we sold Bitcoin when it was in the $60,000 range and invested proceeds in infrastructure instead.” Not only did this allow CleanSpark to acquire its new mining facility in Sandersville, Georgia, but Schlutz also noted that the firm is currently purchasing Bitcoin mining rigs at a very low rate. “We are buying rigs for $17 per terahash that one year ago cost $100 per terahash.”As a number of miners are forced to sell their equipment, both used and new mining rigs are being sold at below market prices, creating buying opportunities for firms like CleanSpark. Scott Offord, owner of Scott’s Crypto Mining — a service that provides new and used mining equipment, along with mining training courses — told Cointelegraph that prices for miners are now very inexpensive, partly based on a lack of demand due to the low price of Bitcoin. Offord added that many of the used miners he is currently selling have come from hosting facilities in debt. He said:“During the last bull run you couldn’t get miners without a 6-month lead time. It’s the opposite now since many miners aren’t capitalizing. Usually, Bitcoin miners get rid of their gear because equipment is old and something newer is on the market, but it seems like now people are selling because they need cash flow.”Offord also pointed out that he is seeing a lot of new mining gear hit secondary markets. “Many new generation Antminers are being resold. For example, things like S-19s, which are some of the most efficient miners in the world right now,” he said. In terms of pricing, Offord explained that crypto miners may be able to buy a new Antminer S-19j pro for about $20 per terrahash. “This same machine would have cost three times as much with a three-month lead time one year ago,” he added. Echoing Offord, Andy Long, chief operating officer of Bitcoin mining firm White Rock Management, told Cointelegraph that miners who are selling equipment are generally doing so to cover debt payments for hardware bought when prices were higher. “Hardware is now being bought by well-capitalized miners and will continue to be used to secure the network,” he said. White Rock Management Texas Mining Site. Source: White Rock Management According to Long, White Rock Management’s operations in the United States have not been impacted by the bear market, adding that its facility in Texas operates completely off-grid. “White Rock’s U.S. operations are powered by flared natural gas, while our mining operations in Sweden are also 100% hydroelectric powered.”Bitcoin miners rethink business strategiesWhile miners like CleanSpark and White Rock Management continue to grow, others may need to rethink their business strategies. Elliot David, head of climate strategy and partnerships at Sustainable Bitcoin Protocol — a green Bitcoin mining certification protocol — told Cointelegraph that he believes conditions for miners are going to get worse before things improve. “Miners that want to survive the long term will have to change their strategy,” he said. Indeed, some miners are making adjustments. For example, Jonathan Bates, CEO of crypto mining firm BitMine, recently mentioned in a press release that due to the sharp decline in mining rig prices, the firm will currently only focus on self-mining rather than hosting for others. “Given the sharp drop in ASIC prices, we feel that focusing on self-mining is a better use of our datacenter equipment and a better use of firm capital at this time,” he stated. He added that the firm plans to “pursue joint ventures and partnerships where our infrastructure equipment can be paired with ASIC miners valued at current prices.”The press release further noted that on Oct. 19, Bitmine entered into a repurchase and hosting agreement with The Crypto Company (TCC), a publicly listed blockchain company. Under this agreement, Bitmine agreed to repurchase certain ASIC miners previously sold to TCC while also purchasing additional ASIC miners owned by TCC. Bitmine will also terminate the hosting agreement that it had established with TCC. To be specific, Bitmine sold TCC 70 Antminer T-17s for $175,000, along with 25 Whatsminers for $162,500, for a total purchase of $337,500 during February this year. Simultaneously, Bitmine and TCC entered into a hosting agreement under which Bitmine agreed to host the miners, along with other miners owned by TCC. Due to current conditions, it’s been noted that Bitmine will accept the return of the 70 Antminer TY-17s for a credit of $175,000 as a warranty claim. Bitmine will also purchase the 25 Whatsminers for $62,500 and the 72 Antminer T-19s from TCC for $144,000. This marks a significant decrease in price from when the units were initially sold.In 2021 — during the height of the crypto bull run — Bitmine entered into an agreement with a telecommunications company located in Trinidad and Tobago. The agreement allows Bitmine to co-locate up to 125 800-kilowatt containers for hosting miners over 93 potential locations. Bitmine is also able to co-locate containers at its own pace, paying a fixed amount per container, along with the electricity costs incurred by its containers. At the time of the agreement, Bitmine noted that the electricity rate expected to pay for the hosting containers was $0.035 cents per kilowatt-hour. This was based on the rate currently paid by the telecommunications company. In October of this year, Bitmine completed the installation of its initial hosting containers in Trinidad. However, prior to commencing operations, Bitmine shared that the telecommunications company advised that the electric company would not honor its existing agreement and instead indicated that the rate would be approximately $0.09 per kilowatt-hour. Although the telecommunications company has protested this decision, Bitmine has chosen to delay the installation of additional containers in Trinidad until the dispute is resolved. The future of crypto miningGiven recent changes being made by miners, David believes that the crypto-mining industry is approaching a junction. “Miners will need to diversify their revenue streams,” he said. With this in mind, he explained that there has been growing interest from clean energy miners that want to work with Sustainable Bitcoin Protocol to ensure sustainable mining practices as a way to be more financially resilient.Echoing this, Offord mentioned that he is seeing more interest from miners regarding their environmental impact. “Miners are seeking opportunities in places where there is flare gas that needs to be mitigated, or where biofuel is being created from farm waste. Miners are not just focused on building a Bitcoin mine, but want to build something sustainable that can be carbon negative.” In addition to sustainability, David pointed out that regulations are becoming more important than ever before for crypto miners. He noted that this is especially true within the United States, noting:“The industry in the U.S. is becoming increasingly aware that unless they regulate themselves that the various levels of government might step in. I’ve spoken with a number of policymakers and staffers, and in a crunch the Bitcoin mining industry will be a likely first target.”

Čítaj viac

Sub-$20K Bitcoin price puts BTC miner profits under pressure as hash rate soars

October witnessed a surge in Bitcoin’s (BTC) hash rate which is pushing the metric to a new high of 245 Exahashes per second. These changes led to a sharp decrease in the hash price, resulting in a drop in the profit margins for BTC miners reaching a low of $66.8 USD/PH (per one quadrillion hashes per second) on Oct. 24, 2022.According to Luxor Technologies, “hashprice” is the revenue BTC miners earn per unit of hash rate, which is the total computational power deployed by miners processing transactions on a proof-of-work network.Hashprice Index. Source: Hash Rate IndexNot only has volume been inconsistent, the Bitcoin hash rate increased last week to an average of 269 EH/s. This means the difficult hash rate has been rising since July 2022. Bitcoin market price vs Bitcoin difficulty. Source: Blockchain.comSeveral factors, including expansion of mining operations, which creates miner competitiveness, increased use of ASIC miners which are more efficient than their alternatives and the Ethereum Merge led to some Ethereum (ETH) mining firms to fill empty rack space from non-operating ETH GPU mining with BTC specific ASIC miners.Consequently, the surge in the hash rate resulted in an adjustment of the Bitcoin difficulty at a time when BTC’s price was dropping. As expected, after the spike of the hash rate and the increase in the Bitcoin difficulty, the hash price plummeted to $0.0657 tera hash per day, thereby reducing the level of profit. Bitcoin price versus hash rate. Source: GlassnodeIncrease in mining costs translates to compressed profitsA contributing factor to the depressed profit level is the general rise in BTC mining costs. For example, there has been a sharp increase in the price of electricity in the U.S. From July 2021 to July 2022 alone, its price increased by 25%, from $75.20 to $94.30 per megawatt hour. Energy prices also tend to increase in winter as people need to heat their homes. The Bitcoin mining industry is already seeing a rise of mining in Kazakhstan due to affordable energy. Bitcoin miners face other rising costs such as the hosting fee, acquisition of miners and installing or upgrading of the cooling systems. During the 2020 to 2021 crypto bull market, Bitcoin mining companies took out loans when BTC and equipment prices were also much higher. This means that the interest on existing debts themselves could hurt newer and overleveraged mining firms.It is clear that the increase in hash rate and Bitcoin difficulty, as well as the decrease in hash price leads to a compressed profit margins. The following graph shows a decrease in profits in a landscape where hash rate, difficulty and the cost of electricity continue to rise. Mining expansion plans for major public BTC miners. Source: TwitterIf the hash rate continues to increase amid a falling hashprice, the profit margin will continue to decrease, possibly leading some mining firms to close up shop permanently. One possible outcome is that lean (cooler balance sheets) mining firms like Marathon may be able to purchase liquidated equipment and rack space from bloated mining companies that fail. Mining firms that are staying lean while attempting to scale may prove victorious. Mining companies such as Core Scientific, Marathon, Riot, Bitfarm and CleanSpark are preparing for expansion even as many miners are finding profitability difficult. Related: Public Bitcoin miners’ hash rate is booming — but is it actually bearish for BTC price?Is sustainability the answer? In view of the difficulties discussed, BTC mining firms should adopt sustainable BTC mining models for both profitability potential and to ease regulators. This should include using renewable energy sources, increasing production capacity and installing advanced cooling systems.Mining firms can enhance their operations by using renewable energy from wind power, solar power and hydro which concurrently reduces costs and the carbon footprint. This approach can lead to more consistency and sustainability in Bitcoin mining energy costs. Norway has managed to capture 1% of all Bitcoin mining through a 100% renewable energy approach.The depressed Bitcoin price, high hash rate and Bitcoin difficulty as well as low hash price contribute to small profit margins which may lead to sustainable, decentralized mining practices across the industry.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Čítaj viac
Načítava

Získaj BONUS 8 € v Bitcoinoch

nakup bitcoin z karty

Registrácia Binance

Burza Binance

Aktuálne kurzy