According to the Financial Times, the latest data show that miners have reduced bitcoin production as the sinking values of the most popular cryptocurrency along with rising electricity costs will reduce their profits.
The so-called "hash rate" - a measure of the amount of energy spent on new bitcoins - has fallen by 4 percent since the beginning of the week, according to Blockchain.com. The decline suggests that miners have spent less energy on mining, that is, solving complex computer operations that generate bitcoins.
Blockchain.com also has data showing that the total amount paid to miners for new bitcoins has fallen to its lowest level in nearly a year. This is reflected in the value of shares of companies engaged in this business, which are listed on stock exchanges.
Thus, the share price of Marathon Digital and Hut 8 has been cut by 40 percent in the past month, while the stock market capitalization of Argo Blockchain has fallen by 35 percent. “Currently, it’s not fun to be in the mining business,” said Alexander Neumueller, digital assets project lead at the Cambridge Centre for Alternative Finance.
The cause lies in the collapse of stable cryptocurrencies terraUSD and the luna, and recently the crypto bank Celsius stopped paying money to customers, further increasing sales pressure. With $ 3.2 trillion at the market capitalization of all cryptocurrencies in November, it has now fallen below $ 1 trillion.
This year alone, the value of bitcoin has halved, and this week its price has fallen below $ 21,000. Yesterday around noon bitcoin was traded at $ 21,209. Compared to a record value in November last year when it was traded at $ 69,000, it weakened by about 70 percent.
“There are many miners in the industry who are subject to fluctuations in energy prices. As such, they are feeling pressure from two different directions: high costs coupled with lower revenue per bitcoin generated,” said Charlie Schumacher, a spokesperson for Marathon Digital, one of the world’s largest bitcoin miners.
“Companies that have been thoughtfully planning for the downturn for some time are likely to weather this period, but many have acted with impulse at the height of the market, and may be stretched and underfunded in the coming months,” said Jaime Leverton, chief executive of Canadian-listed Hut 8.