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Mining News in Review: $17K Bitcoin Price, Mining Costs, and More

Thread 🧵: " Miner's capitulation ?"

As Bitcoin price continues to trade around 17k after the FTX debacle, focus has turned to Bitcoin Miners.

With high energy costs and low BTC price there have been rumours of impending defaults on Miner debt.

Let's talk:

BTC Miners get paid in 2 ways:

- Transaction fees

- Block rewards - mining a new block is rewarded with 6.25BTC currently.

Every 4 years the Bitcoin Halving causes the block reward to reduce by half.

In 2024 we will see this block reward drop from 6.25 BTC to 3.125 BTC

Now the machines are coming online forcing the difficulty higher at a time of high energy prices and low BTC price.

This is causing the profit margins to get squeezed. On top of this the value of the machines has dropped significantly.

Often these machines are used as collateral for loans. As this valuation drops so does the level of collateral miners have.

Despite this, more machines are due to come online in the coming months forcing hash rate to new all-time highs.

Over the past 6 months as the price of BTC has dropped below 20k the cost of mining has significantly risen.

Add in the war between Russia and Ukraine and the impact this has had on energy prices, and you can see why miners are struggling.

So if we are assuming miners are in trouble and we can see who potentially has the most debt and is therefore most at risk.

How has this affected stock price of public mining companies?

Let's take a look at this thread:

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