It’s fair to say that the past few months have been pretty hard on bitcoin miners, with the leading cryptocurrency seeing its market cap fall below the USD 100 million threshold for the first time in over a year.
Times are tough for miners, with the recent drop below USD 4,000 rendering many operations unprofitable, which has seen around 100,000 individual miners close up shop and call it a day, for the time being at least.
Malachi Salcido, head of one of the largest mining operations in North America, claims that “we are entering in the phase when there’s a flushing out of the market.”
Head of Washington-based Salcido Enterprises, Salcido believes that “there will be relatively few operations that come out the other side.”
Only profitable above USD 4,500
It’s generally considered that the majority of bitcoin miners are only profitable when bitcoin is trading above USD 4,500, which hasn’t been the case since November 19th.
Salcido also credits other factors for his companies continued success, with them owning all of their own rigs rather than hosting miners and the electricity that Salcido Enterprises uses comes cheap, generated by the Wells Hydroelectric project in Douglas County and costing half what miners in China are currently paying, with many of those miners being shut down by authorities.
Sam Doctor, Fundstrat Global Advisors head of data science research commented last week that “because of the current depressed price, many bitcoin miners have been unable to sustain operations.”
Mr. Doctor confirmed that mining bitcoin was only profitable when the coin is trading over USD 4,500, or even USD 5,700 when elements such as depreciation are taken into account.
It’s not all negative
One London-based company doesn’t see things as being quite so bleak.
Making its debut on the London Stock Exchange in August of this year, Argo Blockchain claims that its crypto mining packages have risen by almost 150 percent, from 4,200 on the 1st of October, to over 10,300 today.
Co-founder of Argo Mike Edwards said that their “mining packages are being snapped up as quickly as we make these available and demand continues to exceed supply.”
Offering users a service that allows them to mine coins using Argo’s servers for a monthly fee, the company is part of a process that was very lucrative during the bitcoin boom of late last year but has since run into problems since the performance of cryptocurrency, in general, has taken a hit.
Despite all of that, Argo Blockchain remains positive, with Mr. Edwards continuing that “despite a recent downturn in the cryptocurrency market, we are continuing to experience a strong ramp-up in revenues due to good execution of our growth strategy.”
Lover of all things crypto, blockchain and AI, professional tech scribe & part of the editorial team at Crypto Disrupt.