Almost 1.3 million Bitmain S9 miners have been forced to shut down as Bitcoin mining has become unprofitable this year due to the bearish market trend, a report by Bitmex says.
The hash rate of Bitcoin has fallen by almost 30% in November alone, reflecting the sharp price drop since last month. The trend has severely affected all of the crypto trading community: from small-time home miners and investors to large companies and mining pools, especially the Chinese mining provinces. The fall in Bitcoin price has taken a massive chunk out of the miners’ share of profits.
The Bitcoin mining industry’s revenue stream in December has declined to almost half of what it was in November of 2018. Last month, the revenue was close to $13 million a day which has since dropped to nearly $6 million a day in December. Large swaths of miners are shutting down their mines as costs for maintaining the expensive mining hardware are starting to outweigh the profits generated. Cryptocurrency exchange Bitmain has reportedly blamed the Bitcoin Cash hard fork as one of the primary reasons for the market crash. The report by Bitmex also says that crypto intelligence platform Boltzmann had noticed a strange uptick in activity just before the most controversial hard fork on November 12th. The platform reported that a large amount of Bitcoin was sold on that day which may be what triggered the market crash.
The vast majority of participants run on tight margins. Virtually every decision made by a miner is essential — where they choose to operate, what they decide to mine, and which pool they decide on all play a role in the profitability of their operation. Hardware expenses are at least as necessary as the cost of electricity, which varies, and returns on investment sometimes take several months to realize.
As a result, it is fair to expect that large amounts of Bitcoin will continue to be sold regardless of how low the prices fall for quite some time, putting the market under increased pressure at a time when crypto markets are facing massive losses.