Bitcoin miners before the debt spiral

 Bitcoin price plummeted while operating costs increased, making it difficult for many miners

Daniel Jogg, CEO of Enerhash - a blockchain data analysis company, said that many Bitcoin miners are losing money. In some parts of Europe, the estimated electricity price for mining one BTC is up to $25,000, while the price of BTC is currently $29,000. If the cost of machines, operations, and yards is subtracted, miners may run into deficits and risk bankruptcy if the price of this digital currency continues to fall.

Over the past 12 months, electricity prices in Texas, a hot spot for cryptocurrency mining, have increased by 70% as the heat persists, prompting many miners to quit. According to a Cambridge University study, following the 2021 crypto mining ban in China, the US now accounts for 37.84% of global mining activity. According to experts, Bitcoin miners seem to be balancing on the wire, the difference between a rising electricity price on the one hand and a falling BTC price on the other.

Another problem is the increasing difficulty of the algorithm, which reduces the mining output. In other words, miners are paying more to mine less Bitcoin, and the digital currency they earn is depreciating.

According to Sam Doctor, Chief Strategy Officer at digital asset investment bank BitOoda, even miners using modern mining systems are earning less than before. He said older generation ASICs (specialized Bitcoin miners), from S9 and earlier, still account for a third of the total number of Bitcoin miners globally but are almost no longer profitable. “With current energy prices, miners without fixed electricity supply contracts face a lot of pressure,” said a BitOoda representative.
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