Crypto Mining Space Facing Repercussions of Market Downturn

For a while now, the whole crypto space is going through tough situations. Major cryptocurrencies including bitcoin (BTC), Ethereum (ETH), Cardano (ADA), BNB (BNB), Solana (SOL), and several others, are struggling to keep pace for a while now. The embattling of the crypto market makes an impact on related sectors—crypto transfer, crypto mining, etc.

Crypto mining, meanwhile, is amongst the worst hit sectors across the crypto space. This happened for a lot of different reasons interconnected to each other, which in the end brought drastic losses for the mining sector.

Data and statistics can clarify the picture better. According to Blockchain.com data, the global crypto mining revenue dropped from 62 million USD to 17.2 million USD. The former was the stage when cryptocurrencies were going through one of their golden times. Prices of almost every other crypto asset were performing significantly well.

However, soon after the phase in November 2021, cryptocurrencies across the market started trembling. Instances that took place in the later part, since starting of this year—Russia-Ukraine war, Federal Reserves interest rates hike, global inflation concerns, etc.—made a drastic impact on crypto and eventually on crypto mining.

At the time when digital assets were attaining their all-time highs, crypto mining profitability was also impressive. For instance, bitcoin mining profits were around 0.45 USD for one terahash per second, which later reduced to 0.119 USD to even 0.07 USD.

The reduction in crypto mining revenue and profitability clearly led to the loss of major crypto miners. Stocks of Riot Blockchain, Marathon Digital, and Valkyrie Bitcoin Miner ETF have seen fall upto 60%. Mining firms like Compute North went on to file for bankruptcy following the inability to continue its operation due to rising costs.

On the other hand, experts think this time could also be an opportunity to have crypto mining rigs at discount. Many crypto mining instruments which might cost 10,000 USD once could be available at a discount of 50% to 75%.

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