Bloomberg: the situation of miners is getting wors

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Ultramining.com

09:37 Oct 27, 2022

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Bloomberg: the situation of miners is getting wors

One of the world's leading media published a review of the situation in the mining industry, which noted the very negative impact of cryptowinter on what is happening in the cryptocurrency mining field.

First of all, David Pan noted the negative result presented by major miners at the end of Q2. Everything is complicated by the fact that now comes the reporting period for Q3. There is no reason to believe that the result will be more positive.

In the spring, the energy-intensive digital currency mining industry experienced difficulties due to rising electricity costs. As a result, three market-leading companies showed a loss of $ 1 billion for the second quarter. We are talking about Core Scientific, Marathon, and Riot. On the whole, the industry was trying to cover the increased costs by selling BTC.

Price stabilization in Q3 did not help miners to grow and was not a driver that would improve the market situation. Resource problems also did not go anywhere. What's more, major companies operating in Texas (Riot, Argo) had to suspend cryptocurrency mining due to the high load on the network.

It had an impact on the number of profits. For example, at Argo, the adjusted gross margin fell to 20%, down from 80% at the end of 2021. This affected publicly traded stocks: they lost at least 50%.

That the situation of miners in Q3 is even worse than in the previous quarter, says the representative of Braiins Daniel Frumkin. He noted that

In Q2, miners managed to earn more, while now the situation is more difficult. It is due to lower margins, which remained so throughout the quarter.

The fact that the situation is getting worse is also evidenced by the major miners selling their shares. Core Scientific, Iris Energy, and Argo sold off BTC stocks and began selling off securities, risking shareholder discontent.

We should not forget that the complexity of mining has reached record levels. It means high competition, which further reduces miners' profits.


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