NeuroInvest 3 minutes reading from Bitcoin

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?


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 ...


... 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...


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..


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

As a comparison:

In Dec, miner returns were

0.32 USD/Th/Day


= 0.07 USD/Th/Day


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

Here 🔻


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


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