Miners turn off the lights in the face of bitcoin crash
The bitcoin rate fell 24% from August to November, so for JP Morgan Chase bitcoin prices fell so much that for many it is no longer profitable.
It may be that bitcoin miners, hit hard by the cryptocurrency collapse, are throwing in the towel.
According to Blockchain.comthe rate of hash of the bitcoin network, a measure of the computational power devoted to mining the digital currency, fell by approximately one percent. 24 percent from an all-time high in August to on November 24.
While the decline could be due in part to miners switching to other cryptocurrencies, JPMorgan Chase says some in the industry are losing money in the wake of the bitcoin price crash.
"This suggests that prices have fallen to a point where mining is not profitable for some," said JPMorgan strategists led by Nikolaos Panigirtzoglou in a November 23 report, referring to the drop in the hash rate.
Bitcoin miners, who perform the calculations necessary to confirm transactions in the cryptocurrency, are rewarded for their efforts. If prices suffer a sustained drop below the profitable costs of mining (determined by electricity bills, mining platform efficiency and other factors), they may be forced to shut down to avoid operating at a loss.
The cost of profitability to mine a single bitcoin using the platform. Bitmain Antminer S9 was estimated at seven thousand dollars in a report dated November 16, 2001 Fundstrat Global Advisorsalthough the level is probably lower for some miners with access to electricity and cheap equipment.
The bitcoin, which has fallen by about a 80 percent since its peak in December, it was trading at three thousand 912 dollars at 5:35 a.m. New York time on Monday.
A major mining shakeup could be bad news for chipmakers, as Taiwan Semiconductor Manufacturing y Nvidiaand for designers of mining platforms such as Bitmain Technologies they plan to carry outinitial public offerings.
Still, there is a silver lining for miners who survive the price slump, notes Ryan Rabagliachief operator of OSLa cryptocurrency trading company, in Hong Kong.
As weaker participants withdraw from the bitcoin network, the difficulty of mining cryptocurrencies decreases. Ultimately this sacrifice could benefit survivorsassuming the price of bitcoin does not fall too fast.