Crypto markets have seen deep cuts in prices over past one week or so and the industry that has been impacted the most because of this fall is the crypto mining industry. As prices of electricity have been getting expensive and this drop in crypto prices has made cryptocurrency mining completely unviable resultant a lot of crypto mining shops are going dark.
NewsFlow from Crypto Mining industry speaks of pain
As the prices of cryptocurrency began to plunge, everyone was aware that the crypto mining industry would be affected, but little did anyone know that it would lead to calamities like bankruptcies and mining shops shutting down.
It all seems to have started with the news that came in from the United States where GigaWatt Inc., appeared at Washington’s Eastern District federal court and filled their Chapter 11(Bankruptcy) documents which revealed that the company had less than USD 50000 worth of assets and its largest creditors owed nearly $70 million.
Slowly all attention turned to China, which has long been the most popular country for bitcoin and cryptocurrency mining thanks to the low rates and charges for electricity. But, with crypto prices below the floor levels now, these low energy rates are not enough to keep crypto mining in a viable range.
A news report appeared in South China Morning Post that gave the plight of the Chinese crypto mining industry. It quoted
A group of Chinese cryptocurrency miners, who declined to be named for fear of government reprisal, said they have already shut down 20,000 rigs, or about 10 percent of the total number of machines they operate at an average power cost of 0.4 yuan per kWh.
There has been some more news flowing in from China these dying crypto rigs forcibly selling the machine at the price by kilograms. The founder of F2Pool, a bitcoin mining giant in China was also quoted saying that the sudden crash of bitcoin has led to thousands of mining companies to shut down.
Some local media sources from China are also reporting that in the last few days that hashrate of bitcoin has fallen by more than 50 percent, to 34 quintillion
Among the equipment guys, the cryptocurrency sell-off has now forced miners to remove at least four high end models of bitcoin mining equipment, which includes the Antminer S7 and Antminer S9 from Bitmain Technologies and AvalonMiner 741 from Canaan Creative, because these have become too expensive to operate under present market conditions, according to estimates by F2Pool on Wednesday.
Apart from model removal, the fate of the IPO both Canaan Creative and Bitmain hangs in middle. According to the report published in South China Morning Post, Beijing-based Bitmain and Canaan, headquartered in the eastern coastal city of Hangzhou, are the world’s two biggest suppliers of cryptocurrency mining rigs. These two companies, along with smaller rival Ebang International, have separately announced plans for an initial public offering in Hong Kong.
Canaan is said to have let its initial public offering application lapse and there is no word on Bitmain’s IPO as of yet, but it certainly looks like it waited too long for its listing.
Well, it looks like hell has broken out for the Mining companies as well as crypto mining equipment manufactures. Although the short-term outlook seems meek, the community still hopes for a speedy recovery of markets so these rigs can flourish again
Will the markets recover soon and bring back glory days for the mining industry? Do let us know your views on the same.
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Divya Bhatia from Computer science background is a full-time content writer at Coingape. Her passion lies in writing and delivering apt information to users. Currently, she does not hold any form of cryptocurrencies. Reach out to her at [email protected]