Brussels, Europe Brief News – Bitcoin miners are struggling Big time and that is directly creating massive pressure on the Crypto prices and market.
The cryptocurrency’s Successful rally in 2021 attracted so many beginners to start mining. As a result the hashrate used by bitcoin miners hit over $200 million ‘terahashes’ per second during the period of last six months.
An increasing hashrate makes it difficult for miners to earn coins and cover the running capital which can be in the form of electricity, hardware and staff. There are high chances that most of them will sell off their newly minted cryptocurrency.
Justin d’Anethan, Institutional Sales Director at Crypto Financial Services Firm Amber Group said “ Running costs are a major factor in miner’s decision to hold or sell newly acquired coins”.
He further added “They are the first and most natural sellers in the crypto space and so definitely impact prices”.
In the beginning of November, the overall value of the coins held in miner’s wallets significantly dropped from $114 billion to only $75 billion.
Miners are now starting to transfer more coins to exchanges than adding them in their reserves. According to various experts, this gives a clear indication that the miners are selling or atleast having an intent to sell.
The world’s dominant cryptocurrency ‘Bitcoin’ is now trading at about $34,854 which is approximately 45% lower than its November 10 high of nearly $69,000.
What does Bitcoin cost?
Bitcoin mining is the process by which a network of computers checks and validates a block of transaction that then gets added to the blockchain. In return, miners get rewarded for finishing the block.
The seven day average of total mining cost per transaction has drastically dropped to $176.8 from a record high of $235.57 In may last year.
Joe Burnett, Analyst at infrastructure and mining firm blockware solutions “ As more miners join the network difficulty increases in order to slow the insurance of bitcoin”.
Bitcoin’s inherent structure is also creating some amount of pressure on the miners. Bitcoin was created with a final limit of $21 million coins and reportedly $19 million coins have already been minted.
It usually takes roughly 10 minutes to mine one block and the reward for miners on mining one block is 6.25 bitcoins which is automatically minimised after a four years period.
