If Bitcoin’s price continues to plummet, miners could be broke sooner than later.
The amount of Bitcoin held in miner wallets hit a 10-month low in recent weeks. Bitcoin (BTC) miners are responsible for creating more of the cryptocurrency every day, and BTC mining is how new bitcoins enter circulation in the first place.
Struggling Bitcoin miners were already counting pennies ahead of this latest crash, but now, they’re under even more pressure than ever with dwindling profits. Many are dumping their coins and turning off their machines until the light at the end of the tunnel shines.
Bitcoin miners spend their days mining blocks and verifying transactions by solving complicated algorithm problems, with the incentive being attractive BTC rewards. But how much a miner makes depends heavily on the current Bitcoin price, which is why they struggle to stay afloat in times like these – especially with Bitcoin’s recent 22% price drop (its biggest since June).
According to CoinDesk.com and data tracked by Glassnode, miners’ wallet balance dropped by 9,402 to a 10-month low of 1.826 million. That’s just over USD$30 billion.
The crisis is only intensified by rising energy prices and operational costs, which are seeing solo miners and BTC mining companies losing significant amounts of revenue. The impact is rippling through to mining farms which have started to sell their underlying holdings.
According to Charles Edwards of Capriole, the average miner’s power bill far exceeds their income, which is why many are switching off their machines for the time being until this prolonged bear market softens its grip on the global BTC mining community.
With the fact that BTC’s price officially dropped below the $17,000 mark in the past few days, prospects are grim for miners who admit that mining is no longer profitable for them. As we write this, Bitcoin’s trading price dropped by 5% in the past week alone.
Many BTC miners are signing up for PEGA Pool, the world’s first eco-friendly mining pool that uses a portion of its members’ fees to plant trees in an effort to offset the CO2 spewed into the atmosphere by the crypto industry daily. Apart from rewarding renewable energy mining, PEGA Pool is helping struggling Bitcoin miners save even further by offering a 50% pool fee reduction for life.PEGA Pool’s highly anticipated launch is set for Q1 of 2023, and it’s set to take the mining industry by storm. Countless optimistic BTC miners are already on board, and the future is looking bright for the sector once more. PEGA Pool’s reputation precedes them as the 13th largest mining pool in the world, as per BTC.com.
