Bitcoin Price Crash Causes Chinese Bitcoin Miners To Shut Their Operations
Chinese Bitcoin Miners Shutdown Operation as Bitcoin Price Plummets
Following the recent cryptocurrency crash led by Bitcoin, profitability of bitcoin mining seems to have declined drastically. This has led to the shutting down of operations by large bitcoin mining farms in China.
The shutdown is as a result of increasing electricity tariffs in the dry season which profits from Bitcoin mining cannot pay let alone cover other running costs. This is really difficult for the miners as their hitherto expensive mining equipment can only go for about one-twentieth of their former prices. Some miners have even switched to the BCH network as the computing power of the Bitcoin network has dropped by 8%, hoping that BCH mining will be more profitable.
This is not the first shutdown of cryptocurrency mining farms in recent times. Just last week, two bitcoin miners abandoned facilities in a Swedish county, one for unaffordable electricity tariffs, leaving a debt of $1.5 million while the second couldn’t afford to pay the accumulated rent of $50,000 for the land the company acquired on lease.
These incidents raise several questions among Bitcoin enthusiasts. Is Bitcoin mining becoming really unprofitable? And if yes, what is the fate of the network which depends on miners to maintain its integrity?
Some experts believe the unprofitability will discourage bitcoin miners and reduce the supply of Bitcoin thus driving the price up. However, this seems to rather create panic and may drive investors away from the asset, resulting in more sell-offs that will further crash the market as we have witnessed this week.
Bitcoin and other cryptocurrencies have experienced the bear market throughout the week and there seems to be no sign of relief in sight. Based on data from Coinmarketcap.com, BTC currently trades at $4,607.95 which is way less than the $6,000 mark predicted by several experts as the bottom for the year.
Although there are several bullish predictions for the end-of-year price, the crypto community is skeptical concerning the actualization of those predictions considering the current state of things in the market. Investors and enthusiasts alike are however looking forward to improvements that will make mining profitable once again and sustainable also for the maintenance of the Bitcoin network in the future.