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Bitcoin Miners Struggle for Survival
The current state of Bitcoin mining is dire, as miners face unprecedented operational challenges. The Bitcoin price has stabilized around $93,000, but the mining sector is experiencing significant turmoil. The "Hashprice," which represents potential revenue per petahash per second of computing power, has plummeted from approximately $55 in the third quarter to just $35 currently. This decline poses a severe threat to miners, as their average "all-in" costs are estimated at $44, which includes not only electricity costs but also depreciation, maintenance, and capital costs for hardware upgrades.
"The squeeze is historic," warns Timothy Misir, Head of Research at BRN.
According to Misir, the payback periods for expensive mining equipment have now extended beyond 1,000 days, a timeframe that exceeds the period until the next halving cycle. This situation raises the risk of capitulation, particularly if Bitcoin falls below the $85,000 mark, which could trigger "distressed selling" by financially weaker miners attempting to avoid bankruptcy.
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In summary, Bitcoin miners are currently facing a critical juncture, with operational costs exceeding revenues and the risk of market exit looming for less efficient operators.
External Stimuli Fail to Revive Market
Despite external efforts to stimulate the market, such as the Federal Reserve's recent injection of $13.5 billion into the banking system—the second-largest liquidity boost since the pandemic—the response from the cryptocurrency market has been tepid. Typically, such measures would bolster risk assets, but Bitcoin has not benefited from this influx of liquidity. In contrast, traditional safe-haven assets like gold and silver have seen significant gains, with gold up 60% and silver up 102% this year.
Weak economic indicators, such as the ISM Purchasing Managers Index, which remains at 48.2, indicate ongoing contraction and have further driven investors away from cryptocurrencies in favor of safer investments. Without a substantial increase in Bitcoin prices, the market may undergo a cleansing process that could eliminate inefficient miners.
In conclusion, the lack of market response to external financial stimuli highlights the ongoing struggles within the Bitcoin mining sector, as miners brace for potential market corrections.
Current Market Outlook
As the situation unfolds, DER AKTIONÄR is currently focusing on Cipher Mining, which not only engages in mining operations but is also establishing initial infrastructure deals with AI data centers. This strategic positioning may provide a buffer against the ongoing challenges faced by the broader mining community.
In summary, the outlook for Bitcoin miners remains precarious, with the potential for market consolidation looming as inefficient players may be forced out of the network.
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