Bitcoin Miners Forced to Shut Down Their Mining Rigs

The crypto trade market has been bleeding profusely for over a week now, with significant cryptocurrencies losing Billions in Market capitalization. Bitcoin (BTC), the pioneer among the cryptocurrencies did not fare any different and lost an upwards of 30% of its market cap in last ten days. The Bear plunging over the Bulls might not be a new thing for high-stake traders, but the worst affected are small Miners. These people have a minimal margin when it comes to rewards and running a mining rig. The energy consumption does not leave much in differences to fall back on and continue their mining among tumbling prices.

Many small term miners are worried as they might have to sell their Bitcoins if the bulls do not impact the prices in coming days. BTC is currently trading around the mark of $4,300 – $4,500 and has already touched the yearly low of $4,300. One of the Reddit users puts his agony on display through a thread,

“Pretty concerning for small-time miners like me… Thankfully, I get extremely cheap power but it’s hard to compete with economies of scale when some miners can buy hundreds of ASICs at a time,”

Another user replied on the thread,

“I’m still running but the margins are thin and I might have to come out of pocket to cover some costs if the price drops even more. We’ll just have to do our best to weather this bear market and hopefully we can come out on the other side when the price begins to recover,”

The impact of such volatile prices is now being echoed by Mining firms like Gigawatt, who filed for Bankruptcy on Wednesday and still owes its investors USD 7 million. Another news from China can be termed bizarre at best, as the price drop has forced many Chinese miners to sell the mining rigs in kilograms. The mining giants, F2Pool has even delisted mining rigs like Antminer S7, S9, and AvalonMiner 741 as the cost of operations has exceeded the profit difference.

Loss For one Proves Profit for Another

The difficulties faced by small-time miners forcing them to sell off their mining rigs has opened doors for slightly larger firms, who bought these year-old rigs at throwaway prices from the second-hand market. One such Jack Liao of the Shenzhen, China-based bitcoin mining firm Lightning Asic, says, he has bought around 50,000 mining rigs at $70 each, which costs in access of $300 if bought brand new.

The current phase has even forced the makers of these mining machines to postpone their planned flotas on the honk-kong stock market — two of the top mining rig producer, Bitmain Technologies Holding, and Ebang International Holding decided after looking at the sliding market.

Experts say the plundering rates of Bitcoin is visible by the declining hash rates as many have shut down. As a direct impact of the current events, there has been a decline in the difficulty rates which dropped twice this year and might take another plunge as more and more miners are shutting their machines. Not only that, even the rate at which the blocks get added to the network has slowed down.