December 9, 2022

The Pain of Bitcoin Miners

Times are tough for miners as Bitcoin crashes 70% from its all-time high and difficulty computing is only 3.1% below the record reached in May.
The Pain of Bitcoin Miners

Image source: btc.com

Cumulative mining returns are now 65%lower than the annual average (Puella coefficient). At the same time, the performance of the Antminer S19 ASIC from Bitmain is 80% worse than the November level, and the popular S9 model has completely lost profitability.
The Pain of Bitcoin Miners

Image source: glassnode.com

Since most mining companies have increasedcapacity by attracting investment, the crisis in the industry led to a drop in operating income. To cover the costs, public miners, which make up up to 20% of the world hashrate, have switched to an active sale of Bitcoin.

According to the analytical agency Arcane Research, in May, public miners sold more coins than they mined in a month.

The Pain of Bitcoin Miners

Image source: arcane.no

Their remaining supply is estimated at 46,000 BTC or $943 million. In the event of a prolonged consolidation or continued decline in Bitcoin, public miners will increase sales, thereby exacerbating the situation.
The Pain of Bitcoin Miners

Image Source: Cryptocurrency Exchange StormGain

Miners who have placed theirinstallations in Iran. Before the latest incidents, the country looked the most attractive due to the state regulation of crypto mining and extremely cheap electricity. In terms of the cost of a kilowatt-hour for households, Iran is in the TOP-3 of the global rating, and for miners, tariffs do not exceed 4 cents.

The Pain of Bitcoin Miners

Image source: globalpetrolprices.com

According to the University of Cambridge, Iran's shareat the peak it reached 7.5% of the global Bitcoin hash rate, but in a year and a half the figure dropped to 0.12%. Since the licenses were introduced in July 2019, law enforcement has shut down more than 7,000 illegal farms, seizing hundreds of thousands of devices. But these efforts were not enough.

Contrary to the agreements concluded, Iran inunilaterally decided to completely turn off the miners from the beginning of July due to a shortage of electricity. We are talking about 118 licensed mining companies. According to the Ministry of Energy, they are responsible for the 20% increase in electricity consumption. The shutdown will last at least a month.

Analytical group StormGain

(platform for trading, exchanging and storing cryptocurrency)