Glassnode, the startup behind “the world’s leading blockchain data and intelligence platform”, seems concerned about Bitcoin miners.
Earlier today (6 December 2022), Glassnode said:
“The Bitcoin protocol has just decreased mining difficulty by -7.3%, the largest downwards adjustment since July 2021. Given depressed coin prices, rising energy costs, and debt burdens, the mining industry is under under extreme stress…
“This difficulty adjustment is in response to falling Bitcoin hash-rate. This has resulted in yet another inversion of the Hash-ribbons, as the 30DMA dives below the 60DMA. The last hash-ribbon inversion occurred in early June 2022.“
Also, CoinDesk reported that “the difficulty of mining a bitcoin block fell by 7.32% today, with miners powering off machines as a brutal bear market eats into profit.”
The report went on to say:
“The adjustment at block height 766,080 is the biggest downward change since July 2021, data from mining pool BTC.com shows. That was when hordes of miners dropped off the network following China’s ban on the industry. At the time, the country was the world’s biggest bitcoin mining hub…
“In the past several months, bitcoin miners have been caught between a stubbornly low price of bitcoin that decreases their revenue and high electricity rates that increase costs. Major producers like Core Scientific (CORZ) and Argo Blockchain (ARBK) are dealing with liquidity crunches, while Compute North filed for Chapter 11 bankruptcy.“
On 21 November 2022, Charles Edwards, Co-Founder of digital asset management firm Capriole Investments, took a closer look at the Bitcoin mining industry in the wake of a very painful crypto bear market that started one year ago.
Edwards took to Twitter to say:
“It’s a Bitcoin miner bloodbath. Most aggressive miner selling in almost 7 years now. Up 400% in just 3 weeks! If price doesn’t go up soon, we are going to see a lot of Bitcoin miners out of business… What we are seeing is not sustainable. Mine-and-hodl is not a viable strategy as a Bitcoin miner. Miners are paying the consequences of the ‘never selling’ arrogance widespread just 6 months ago. You need to manage (trade) your Bitcoin position constantly in this market… Any strategy which relies on long-term leverage (positions which can’t be exited immediately) ALWAYS blows up in crypto.“
Featured Image via Pixabay