CleanSpark slashes 2023 hash rate guidance: BTC minors’ troubles continue.

CleanSpark (CLSK) reduced hash rates from 22.4 EH/s to 16 EH/s.
Their partner Lancium was to provide 200 MW power capacity in West Texas.
CLSK shares hopped 2% on Wednesday after falling 76% in 2022.

Bitcoin miners are currently suffering from a trifecta of problems. Rising energy costs, increasing mining difficulty levels and decreasing BTC hash rates. This triangle has caused many big players to either stop their mining facilities or cut down losses by lowering the hash rates. Following the trend, Bitcoin miner CleanSpark (CLSK) has lowered its year-end 2023 hash rates.

CLSK has reduced its computing power guidance from 22.4 EH/s (Exahash per second) to 16 EH/s. They referred to delays by one of their partners, Lancium, in building a new mining facility.

CLSK announced its partnership with Lancium, the energy technology company, earlier this year which was initially for a 200 megawatts (MW) of power capacity in west Texas. This translated to an additional 300 MW in the future and 6.6 EH/s of hash rates.

Lancium had cited capital constraints that affected their end of the bargain and informed CleanSpark regarding the same. Now the expected date of completion has been shifted to late 2023; it might be delivered even after that, and this has caused the mining company to effectuate a guidance cut.

Crypto miners worldwide have been affected acutely by the ongoing crypto winter that caused a massive slump in BTC prices. The crypto market is said to be down by nearly two-thirds from its peak in November 2021. Also, rising energy costs have badly affected yield. All these incidents caused one of the biggest mining data centers in the US, Compute North, to file for chapter 11 bankruptcy protection in September 2021.

And a massive liquidity crunch has been faced by big players in the industry; the list includes names like Core Scientific (CORZ), Argo Blockchain (ARBK) & Greenidge Generation (GREE).

One good news for CleanSpark is that, in addition to the guidance cut, their fourth-quarter revenue has risen by 235% over the same period last year. Although, their net loss had widened by 683% year over year. It was mainly due to a lack of goodwill.

The miner’s shares fell by 2% on Wednesday in post-market trading, all while the BTC prices were slightly up. CLSK shares also traded fairly better than peers, after falling 76% in 2022. While the shares of other mining firms, Core Scientific (CORZ) and Marathon Digital (MARA), have seen more than an 80% decline this year.

To sustain fire requires a golden triangle of fuel, air and heat. Firefighters try to remove any arm to doze off any fire. If a similar concept were to be applied to Bitcoin mining, either the energy costs were to be taken care of, or cheaper energy would be sought. The difficulty levels will not stop increasing, but if the price of BTC rises significantly, then the trifecta problem can be dealt with with ease.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing