Cryptocurrency miners have many fixed costs, such as energy, real estate, and well-equipped computers and rigs to do the actual mining. Digital crypto mining companies sell their shares.
For this reason, it could become margin hell when the market crashes and the value of funds held in cryptocurrencies like Bitcoin drops sharply. Minor is forced to adapt, as he seems to persist.
According to CoinMarketCap, the global cryptocurrency market capitalization is now around $1 trillion, half of what it was in April. When Terra started falling in May, the market fell first, then in June Celsius became the first major crypto lender to freeze customer withdrawals to prevent bank runs.
In June, Arcane Research released a report revealing that publicly traded Bitcoin miners sold more Bitcoin than they mined in May. At the time, it was a shocking statistic. According to Arcane Research analyst Jaran Mellerud, data for July shows that public miners sold 00% of their production in June, reducing their total BTC holdings by 25%.
The companies sold included Core Scientific, which sold $165 million of its bitcoin holdings to ‘enhance liquidity’ and liquidated more than half of its bitcoin supply to pay down debt.
His operations and project management company is looking for locations for data centers and is working with local utilities to accommodate cryptocurrency mining companies. But as the market slumped, it has seen companies that rushed to buy mining equipment last year halt or abandon construction projects.
“After the end of the [Bitmain Antminer S17] and [Antminer S19] era, Bitmain clearly matched supply and demand, and flooded the market. That is the key to our mining,” he told Decrypt by phone at the Mining Disrupt conference. in Miami. ‘
The problem has even spread to hardware manufacturers such as NVIDIA, which have seen their graphics card prices fall by 50%, Bloomberg reported in June.
It’s a difficult situation for large public companies, said Chris Bae, CEO of Enhanced Digital Group.