A few months back, Mike Novogratz actually thought that Bitcoin has finally reached its bottom at $6,200. There was a point when Bitcoin was actually stable at around $6,200 to $6,500. But after the Bitcoin Cash hard fork, things plunged even further. And it isn’t just the investors who panicked. At this point, miners are also shutting down their devices since the price of the cryptocurrency isn’t covering the cost anymore.
Bitcoin mining has become a struggle and it’s the reason for the decreasing hash rate in the Bitcoin network. Unfortunately, crypto investors observers take a closer look at this in order to predict the future price of Bitcoin. Earlier this month, Bitcoin network’s difficulty fell by 15.1 percent. This is quite important since it’s the second-largest drop in history since 2011.
Extent of the Bearish Market
The good news is that it doesn’t really mean that it’s the end of Bitcoin since the difficulty dynamically changes depending on different factors. However, it demonstrates the extent of the bearish market today. According to a study by BitMEX research, the Bitcoin hash rate has declined by more than 31 percent since the start of November. That’s around 1.3 million Antminer S9 being turned off.
Obsolescence of Mining Rigs
There are a number of factors that could make a mining equipment go obsolete. It can be because of the energy cost or even the size of the operation. According to BitMEX, the cumulative bitcoin mining revenue has declined significantly. From $13 million at the start of last month, it dropped to around $6 million per day at the start of December.
The report explained that “In the six-day period ending 3rd December, 21.8% fewer blocks than the expected 144 per day were found, as miners left the network before the difficulty adjusted, and as a result, fewer blocks were found. Therefore in the short term, there was a 21.8% fall in mining incentives on top of the impact of the declining price”.
Limited Machines That Are Profitable
ASICMinerValue.com is a website that calculates the profitability of mining equipment. It computes for the profitability rates of ASIC miners that make use of ASIC chips. According to their latest data, there are only two models that can generate profits. Both of these models were released in October 2018 and indicated that it has $0.58 and $0.21 profits daily. It is the Ebang Ebit E11++ and the ASICminer 8 Nano 44Th. The data was meant for ASIC miners that are used for SHA-256 cryptocurrencies.
The price of the Ebit 11++ is currently at $2,024. Now, considering the profits, it isn’t exactly exciting for the miners. Bitmain even announced that it is already closing its development center in Israel. The company announced that the recent move was due to the “current situation” and “shake-up” of the crypto market.
It was a long time coming. Diar a few months back announced that the big players were the only ones that are gaining profit from crypto mining. These large-scale miners have “deep” pockets that could tolerate price swings and electricity losses. It is quite clear that the bear market has impacted not only the investors but also miners.