The bear market of 2018 is affecting everyone.
Bitcoin miners, those verifying and securing transactions, are starting to throw in the towel in very large numbers.
According to Mao Shixing, founder of F2pool, between 600,000 and 800,000 bitcoin miners have shut down operations in the last 2 weeks alone.
If you are not familiar, F2pool is the 3rd largest mining pool in the world.
According to Shixing, miners are no longer able to make money at the depressed prices and are having to throw in the towel in regards to mining bitcoin.
More about that can be found here:
https://www.coindesk.com/600k-bitcoin-miners-shut-down-in-last-2-weeks-f2pool-founder-estimates
How much does it cost to mine bitcoin?
The global average cost to mine bitcoin is said to be roughly $7k according to Fundstrat research.
Though it is often cheaper than that in some countries due to cheap electricity rates.
Check out some of the rates:
(Source: https://cryptoiscoming.com/bitcoin-price-vs-cost-of-mining/)
As you can see, the current prices are now getting down to the point where even the cheapest miners are having trouble turning a profit.
The miners referenced above were mostly miners out of China, who are finally seeing prices move below many of their break-even points.
Is this good news or bad news?
Well that depends on who you are.
If you are a miner that is no longer able to make a profit, this is bad news.
It also signals that bitcoin mining will likely get more centralized among those that are able to operate with the lowest costs.
Something that most using the bitcoin protocol would not like to see because the more decentralized the network can be, the better.
However, if you are a hodler and investor out there, the fact that prices are falling below the cost to mine likely means we are near a bottom.
According to Tom Lee of Fundstrat Global Advisors, the cost to mine has traditionally marked a floor that bitcoin usually doesn't trade at or below for very long.
That means that miners exiting in droves could mean we are close to seeing a change in direction for the price of bitcoin.
Finally.
Stay informed my friends.
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