- 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.
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