While the sun is shining, bitcoin miners are generating money.
With the recent surge in cryptocurrency prices, the industry has emerged from its slump. Currently, mining businesses are scurrying to lock in earnings before the "halving" of bitcoin, which would see rewards for creating tokens halved.
The next halving, which would slow the issuance of bitcoin—the total supply of which is set at 21 million, of which 19 million have already been mined—is anticipated to occur in April 2024.
"You're seeing a lot of urgency to plug rigs in ahead of the halving," said Gregory Lewis, analyst at brokerage BTIG that covers the 13 biggest U.S.-listed bitcoin miners.
According to cryptocurrency platform Blockchain.com, Bitcoin's hashrate—a measurement of the processing power required to produce a coin—has reached an all-time high. This implies that in order to solve the challenging arithmetic problems that yield bitcoins, miners must exert increasing amounts of force and speed.
According to J.P. Morgan analysts, the hashrate has risen to all-time highs for 11 straight months, with an exceptional spike in October.
After months of stagnation, Bitcoin has increased by almost 37% in the last month to nearly $37,000. This surge has motivated miners to connect their potent computers in order to solve the problems and sell the freshly generated coins.
According to cryptocurrency platform Blockchain.com, Bitcoin's hashrate—a measurement of the processing power required to produce a coin—has reached an all-time high. This implies that in order to solve the challenging arithmetic problems that yield bitcoins, miners must exert increasing amounts of force and speed.
According to J.P. Morgan analysts, the hashrate has risen to all-time highs for 11 straight months, with an exceptional spike in October.
After months of stagnation, Bitcoin has increased by almost 37% in the last month to nearly $37,000. This surge has motivated miners to connect their potent computers in order to solve the problems and sell the freshly generated coins.
"Every halving forces miners not playing that game at a high enough level to get washed out," said William Szamosszegi, CEO of mining company Sazmining.
After previous halvings, bitcoin prices have usually increased. Twelve months after the initial price cut in 2012, it shot up to $126. It increased from $654 to $1,000 in just seven months following the second halving in 2016 and from $8,570 to $18,040 in the same period in 2020.
Miner payouts for Bitcoin dropped to 6.25 bitcoin per block during the third halving in 2020, and the next one is scheduled to drop it to 3.125 bitcoin in April.
The current mining fee for a block is $231,250.
According to Matteo Greco, an analyst at Fineqia International (FNQ.CD), a digital asset investment firm, several mining companies were increasing their hashrate power and modernising their equipment in order to remain competitive.
Some players have resorted to shifting their operations to Central American nations where energy costs are lower and governments are more accepting of cryptocurrencies in an effort to preserve their profit margins.
"It's too early to say if all bitcoin miners are out of the wood," said Ludovic Thomas, portfolio manager at Swiss-based Criptonite Asset Management that invests in digital assets. "Profitability increase always leads to network hashrate and difficulty increase."
(Source:www.cnbctv18.com)
With the recent surge in cryptocurrency prices, the industry has emerged from its slump. Currently, mining businesses are scurrying to lock in earnings before the "halving" of bitcoin, which would see rewards for creating tokens halved.
The next halving, which would slow the issuance of bitcoin—the total supply of which is set at 21 million, of which 19 million have already been mined—is anticipated to occur in April 2024.
"You're seeing a lot of urgency to plug rigs in ahead of the halving," said Gregory Lewis, analyst at brokerage BTIG that covers the 13 biggest U.S.-listed bitcoin miners.
According to cryptocurrency platform Blockchain.com, Bitcoin's hashrate—a measurement of the processing power required to produce a coin—has reached an all-time high. This implies that in order to solve the challenging arithmetic problems that yield bitcoins, miners must exert increasing amounts of force and speed.
According to J.P. Morgan analysts, the hashrate has risen to all-time highs for 11 straight months, with an exceptional spike in October.
After months of stagnation, Bitcoin has increased by almost 37% in the last month to nearly $37,000. This surge has motivated miners to connect their potent computers in order to solve the problems and sell the freshly generated coins.
According to cryptocurrency platform Blockchain.com, Bitcoin's hashrate—a measurement of the processing power required to produce a coin—has reached an all-time high. This implies that in order to solve the challenging arithmetic problems that yield bitcoins, miners must exert increasing amounts of force and speed.
According to J.P. Morgan analysts, the hashrate has risen to all-time highs for 11 straight months, with an exceptional spike in October.
After months of stagnation, Bitcoin has increased by almost 37% in the last month to nearly $37,000. This surge has motivated miners to connect their potent computers in order to solve the problems and sell the freshly generated coins.
"Every halving forces miners not playing that game at a high enough level to get washed out," said William Szamosszegi, CEO of mining company Sazmining.
After previous halvings, bitcoin prices have usually increased. Twelve months after the initial price cut in 2012, it shot up to $126. It increased from $654 to $1,000 in just seven months following the second halving in 2016 and from $8,570 to $18,040 in the same period in 2020.
Miner payouts for Bitcoin dropped to 6.25 bitcoin per block during the third halving in 2020, and the next one is scheduled to drop it to 3.125 bitcoin in April.
The current mining fee for a block is $231,250.
According to Matteo Greco, an analyst at Fineqia International (FNQ.CD), a digital asset investment firm, several mining companies were increasing their hashrate power and modernising their equipment in order to remain competitive.
Some players have resorted to shifting their operations to Central American nations where energy costs are lower and governments are more accepting of cryptocurrencies in an effort to preserve their profit margins.
"It's too early to say if all bitcoin miners are out of the wood," said Ludovic Thomas, portfolio manager at Swiss-based Criptonite Asset Management that invests in digital assets. "Profitability increase always leads to network hashrate and difficulty increase."
(Source:www.cnbctv18.com)
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