Bitcoin miners ‘fight to survive’ in the midst of energy, cryptocurrency

Crypto exchanges are not the only ones struggling in the midst of the wave of sales. Public bitcoin miners are also suffering, having lost over 80% of their revenue since the cryptocurrency peak last year, according to a report from Arcane Research.

Daily revenue for public bitcoin companies fell to $ 18 million in June, said analyst Jaran Mellerud, down from a high of $ 62 million a day in November. Stock prices for mining companies have seen a similar collapse, with miners such as Stronghold and Terawulf losing almost everything

market value

since the top of the crypto.

This is bad news, considering that many companies took out loans last year to finance new infrastructure to increase mining operations when bitcoin demand was at its highest. According to CoinDesk, public mining companies have at least $ 2.16 billion in debt that is at risk of default, unless companies earn enough to pay down their holdings.

“The public bitcoin miners are fighting to survive the ruthless

bear market

“Mellerud wrote in Arcane’s report.” The weakest will die, but the survivors will rise from the ashes stronger than ever. “

He noted that there were several factors that would lead to the collapse of some companies. First, energy prices have skyrocketed amid Western sanctions against Russia: US natural gas rose above $ 9 per million British thermal units in May, the most expensive gas since 2008.

The rising energy costs are also exacerbated by the fact that mining requires more energy, which is historically the largest cost for miners. Bitcoin’s hashrate, a measure of the computing power used to extract bitcoin, has almost doubled since July last year due to increased competition, Arcane’s report states.

And the falling price of bitcoin means that there are lower rewards for miners. Starting at. 17.50 UTC, bitcoin swung around $ 19,690.

“Some miners can either go bankrupt or have parts of the assets bought for cents on the dollar by stronger,” said Mellerud.

Meanwhile, rising interest rates also make it difficult for mining companies to raise capital, he pointed out.

“The declining cash flows from operations and the unwelcome state of the capital markets will make it challenging for these companies to squeeze together the cash needed for their upcoming investments in new machinery or loan repayments,” Mellerud said, adding that the industry will continue to face losses. unless bitcoin saw a price increase in the near future.