Miners Dump Their Stakes as The Crypto Crisis Deepens

  • Bitcoin miners were compelled to use up their bitcoin reserves.
  • To 3.5 million terahashes per second, the total computing power sold fell by 48.5%.
  • Market circumstances are anticipated to continue deteriorating.

Bitcoin miners have been forced to tap into their cryptocurrency stashes as a plunge in prices, rising energy costs, and increased competition bite into profitability.

Notably, miners had already been under extreme pressure before the latest crash, as the long and deep bear market had been continuously shrinking their profits.

The new price plunge is bound to have left many miners with no choice but to liquidate their holdings now. This has led to a sharp decline in the Bitcoin Miner Balance.

Concretely, a manufacturer of bitcoin mining hardware named Canaan (CAN) said that its third-quarter net income fell by 88% to 61.1 million yuan ($8.6 million). The price of bitcoin (BTC) dropped to about $16,000 at this time, which was a considerable decrease from the same period a year prior amid what it dubbed unfavorable market conditions.

To 3.5 million terahashes per second, the total computing power sold fell by 48.5%. However, according to a statement released on Monday by the Beijing-based company, revenue dropped 26% to 978.2 million yuan.

The previous few months have been difficult for a number of mining companies. Compute North, a provider of data centers, declared bankruptcy in September. Liquidity problems also affect Argo Blockchain (ARGO) and Core Scientific (CORZ).

“The bitcoin mining market deteriorated during the third quarter, as the bitcoin price fluctuated and further dipped to around sixteen thousand dollars recently,” CEO Nangeng Zhang said in the statement. “The negative market dynamics have significantly hindered bitcoin miners’ revenues and cash flows. As miners are forced to cut their demand for computing power, we had to adjust our selling price in response.”

Market circumstances are anticipated to continue deteriorating due to “bitcoin’s downward trajectory, rising energy prices, and miners under increased cash pressure,” according to James Jin Cheng, CFO of Canaan.

disclaimer read more

Crypto News Land (cryptonewsland.com) , also abbreviated as “CNL”, is an independent media entity — we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.

Godfrey Mwirigi is an enthusiastic crypto writer with an interest in Bitcoin, blockchain, and technical analysis. With a focus on daily market analysis, his research helps traders and investors alike. His particular interest in digital wallets and blockchain aids his audience in their day-to-day endeavors.

programmer & freelance writer