NeuroInvest
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Under the Hood: Mining Businesses Face Risks Of Default

Under the hood: BTC Mining @glassnode

Risks ensue in some mining operations - with BTC's current valuation, & high-cost of credit, it is no question that certain industries will face distress

1/x 🧵

If I.e Core scientific were to file for bankruptcy, this could send repercussions throughout the industry

Why is this happening?

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For one, the industry itself is very capital intensive, and CoreS acquired the once-upon-a time cheap credit to finance their operations, now, times have changed

When costs exceed production value 🔻and ...

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... credit begins squeezing margins, the baseline factors that stabilize the operations are vulnerable to default

Core-Scientific being on the forefront, and debt being a large variable causing these structural imbalances.

Let's take a look under the hood as promised...

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Since July 23rd, Hash rate has been on the rise,

In terms of cost production - When the block time 🟠increases, hash power🟢 follows. These are cost effective opportunities, and hash power takes advantage.

Vice versa..

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But this time, the preceding difficulty adjustment will likely curtail power

As a comparison:

In Dec, miner returns were

0.32 USD/Th/Day

Now

= 0.07 USD/Th/Day

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A phenomenal explanation about the current situation is explained in-depth by @JMellerud

Here 🔻

7/x

Jaran Mellerud on Twitter
This post is based on this twitter thread.

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