Just last year, Bitcoin was able to reach near $20,000. It easily caught the attention of both investors and regulators all over the world as Bitcoin started at just $1,000 at the beginning of the year. By the start of 2018, regulators made the necessary adjustments in order to prevent the industry from being used by criminals and in order to protect investors. But different countries have different approaches to regulations.
Right now, Bitcoin is still trading below $4,500. That’s around 75% below the all-time high. According to crypto experts, the $4,600 resistance level plays a major role in bringing Bitcoin back to life. Bitcoin had the roughest week dropping almost 30% in just a week. It seemed to have found stability around $6,200 to $6,500 over the past months only to drop after the Bitcoin Cash hard fork.
Miners are Suffering
These days, it is no longer profitable to run your own Bitcoin mining operation in your basement. If you are planning to have a piece of the action, it has already been dominated by large-scale miners. In fact, 70% of Bitcoin’s hashrate can be found in China.
And after the recent drop, at least four mining machines are no longer profitable these days. It costs more to cover for its power. Antminer S7 and Antminer S9 are among these machines. Also, you have AvalonMiner 741.
There are reports saying that the number of mining platforms that are no longer profitable is growing as companies that make use of these machines can no longer cover management and electricity fees of these machines under the current price cap.
Miners Are Shutting Down?
There were reports that miners are shutting down in China after the bearish market. As many as 20,000 rigs are already turned off because of this. For others, there are those miners who saw this opportunity to buy their own mining equipment. This way, they can sell the mining rigs for miners in countries that have cheaper electricity. And for others, there are those that are simply waiting for the cryptocurrency to come back once again.
Unfortunately, many experts believe that the bearish market is going to continue in the coming months and even next year. And this means that it will take a while before miners can operate again and have their profits.
One of the biggest criticisms against Bitcoin is that it makes use of a lot of energy in mining. There was even a report that Bitcoin mining will eventually lead us towards environmental disaster. Collectively, it is said that Bitcoin mining can actually power an entire country. In addition to this, if things continue the way they are, Bitcoin mining could raise the temperature of the world by 2 degrees which could mean irreversible damage to the environment.
While the debate continues regarding the power consumption and the possibility of environmental collapse via Bitcoin mining, it is true that miners have suffered from the bearish market. Could it be possible that regulatory changes could bring the profits back? Could it be possible that institutional investors take interest in cryptos in the coming months?