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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

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Three Bitcoin Mining Difficulty Adjustment In a Row

Three Bitcoin Mining Difficulty Adjustment In a Row
Photo by Karolina Grabowska/selective focus of bitcoins on laptop computer Photo by Karolina Grabowska/selective focus of bitcoins on laptop computer
Three Bitcoin Mining Difficulty Adjustment In a Row
Photo by Karolina Grabowska/selective focus of bitcoins on laptop computer Photo by Karolina Grabowska/selective focus of bitcoins on laptop computer

Bitcoin mining difficulty should be adjusted to decrease by roughly 5% on July 21, 2022. The fourth adjustment in the last five difficulty epochs, and the third in a row, will occur with this adjustment. This reflects the longest stretch of decreases since miners were forced to unplug and leave China as quickly as possible in 2021.

Bitcoin miners have been suffering as a result of the global macro outlook deteriorating throughout 2022 and the bitcoin market going through a massive deleveraging event after Ponzi blow-ups, with many lenders who were exposed to one specific Ponzi scheme — 3 Arrows Capital — getting completely wiped out and driving the price of bitcoin down with them. As a result, the hash price has fallen along with the bitcoin price, reaching a low of $0.08 TH/day precisely one week ago.

With the latest price increase, the hash price has subsequently rebounded to $0.10 TH/day; however, it is obvious that many mining participants are suffering. The holding or selling of bitcoin treasuries held by publicly listed miners and the cost of ASICs are the two metrics I use to measure the suffering. Tens of thousands of bitcoin have been sold by publicly listed miners over the past two months to pay off debt and keep a cash reserve for their operations. On the other hand, the cost of ASICs, expressed in dollars per terahash, has been completely plummeting and has already reached values last seen in late 2020.

This week, the top-of-the-line equipment may be offered for $25 to $30 per TH. To provide some context, it should be noted that machines of the same grade were selling for considerably over $100 per TH before the China ban and for about $100 per TH in December 2022, after the dust from the China ban had settled. As miners choose not to sell bitcoin (or don’t have any to offer in the first place) and instead choose to sell their equipment to fund costs and debt commitments, the price of ASICs is plummeting quickly.

In warehouses all around the United States, tens of thousands of machines have not even been opened. ASICs futures orders worth a lot of money were secured this year by publicly listed miners using their access to the capital markets. Some miners have had trouble locating the required capacity to connect all devices quickly. It is proving too expensive to hang onto those ASICs, whose worth is also dropping since mining stocks and bitcoin’s price have taken a severe beating.

Additionally, mining activities have become unprofitable because of the relatively high cost of power. If they can’t take losses for several months, they’ll stop and sell off their assets (ASICs). Hence the current market’s extraordinarily cheap ASIC pricing.

Given that markets are still in freefall and that the price of bitcoin is at the low $20,000 level, ASICs may continue to lose value over the summer. However, anyone in the mining business with considerable cash and the skills to execute deals may take advantage of the great opportunity presented by these fire sales from desperate miners and manufacturers. Your Uncle Marty believes that the summer of 2022 will be one of the finest periods to start mining bitcoin in history. The time it takes for these machines to pay for themselves will be relatively short if individuals or businesses buy ASICs at current prices, lock in acceptable energy prices, plug their machines in promptly, and the price of bitcoin returns at some point later this year.

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