Hundreds of thousands of Bitcoin miners are 'covering the mat'

 The high electricity price, the difficulty of Bitcoin mining skyrocketed while the price of digital currency fell, leaving hundreds of thousands of miners still in storage.

Last year, miners had to scramble to buy cryptocurrency miners, and manufacturers failed to deliver orders in time. And now, everything has changed completely. Matt Schultz, President of Bitcoin mining company CleanSpark (CLSK), said the company still has 250,000-500,000 unboxed miners. Meanwhile, Ethan Vera, CEO of services company Luxor Technologies, revealed that they have 276,000 miners left in inventory, as of September.

According to Coin Desk, whatever the exact number is, it is clear that cryptocurrency mining is no longer as profitable as it should be. Last month, Bitcoin mining company Compute North filed for bankruptcy.

Many Bitcoin miners are still sitting in the crate. Photo: Yahoo
Many Bitcoin miners are still sitting in the crate. Photo: Coin Desk

Experts say that the plummeting cryptocurrency market has caused miners to no longer invest heavily in hardware. Moreover, the cost of operating the excavator is increasing due to the escalating energy prices. The difficulty of Bitcoin mining is continuously hitting a record causing the reward to be significantly reduced. Some miners said that the service yards still have a lot of space but the costs are too high, so investors do not want to take risks. Vera of Luxor said, since China banned Bitcoin mining, miners flocked to the US and Kazakhstan, the rental services of buffalo plows have increased significantly.

Mike Levitt, CEO of mining company Core Scientific, said that the rental price of Bitcoin miners has increased by 25% in recent months. In the field of cryptocurrency mining, mining rental services are quite popular. Venue providers can engage in low-cost Bitcoin mining by setting up a standard mining space. Miners with money just need to buy a graphics card, a dedicated excavator and then send it here without renting space, building the accompanying infrastructure. The rental price of a mining workshop varies from time to time and depends a lot on the price of electricity.

The escalation of energy prices in general and electricity prices in particular has made service providers no longer profitable. Some try to raise prices, others even go bankrupt because they can't afford the expenses. It is also difficult for diggers to find a cheap place to send their buffalo to plow.

Alex Martini, CEO of New York-based mining company Blockfusion USA, said: "We're half empty, but customers don't care because the price of the service is too high. I will lose. The market is miserable because the price of Bitcoin is too low while the price of electricity is high."

Martini said miners keep the equipment in storage even when it's not operating, believing it's also an investment. As the price of Bitcoin rises, these rigs can increase in price. Meanwhile, some hardware manufacturers are looking to lower the price of new devices. At the end of August, Bitmain, the world's largest manufacturer of cryptocurrency miners, launched a 30% promotion for customers. Some large miners such as CleanSpark, Core Scientific, and Marathon also require hardware partners to offer discounts on contract shipments.

As the cryptocurrency craze grew, miners had to line up to buy machines. They usually deposit a deposit and pay the rest when receiving the machine. Some large contracts add "price protection" clauses when the market is volatile. In the event of a market plunge, Bitmain will lower the price of the miners, the specific reduction rate based on the general situation analysis.

Two other major miners, MicroBT and Canaan, were not available for comment. However, some analysts predict that with the negative effects of the market, the demand for hardware is bone, many cryptocurrency miners may have to cancel orders. The size of the crash will depend on the future price of Bitcoin.

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