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The recent decline in the price of bitcoin is not the only thing that those in the space have had to deal with. It has spilled into other important aspects of the community such as mining. Public and private miners have been having a hard run of it lately with their cash flow plummeting due to the decline in bitcoin’s value. However, that is not the only problem that these miners have had to deal with. Mining production has been hit hard for public miners.
Bitcoin Production Drops
At the end of a very successful 2021, many public bitcoin miners had come forth with roadmaps for how they would improve their BTC production. Each one of these companies had come forward with high promises of where they wanted to get their hashrate to. Naturally, given that the market was doing well at that point, there was no reason on the part of investors to doubt these plans. But the first half of 2022 has painted a brutal picture.
Marathon Digital is undoubtedly one of the leaders in the space when it comes to public bitcoin mining, and it has struggled the hardest when it comes to fulfilling its promises of higher BTC production. Marathon had kicked off the year with a good production rare of 462 BTC. However, since then, its production has continued to plummet. By the end of May, the mining company had only produced 268 BTC, a 42% drop from the volume in January.
Related Reading | Market Liquidations Cross $1.22 Billion Following Bitcoin’s Decline Below $23,000
The case across other top public miners was similar. Although not all of them have recorded a steady plummet like Marathon, they have been unable to maintain consistent growth in BTC production. Even Core Scientific has found itself in this rut.
public miners' production remain unsteady | Source: Arcane Research
Bitfarms was the only exception and it has continued to maintain consistent growth through the first half of 2022. To put this into perspective, Bitfarms had seen 301 BTC produced in January. At the end of May, the BTC produced had risen 43% to 431 BTC.
A lot of these companies are faced with an increase in mining difficulty over the last five months. Additionally, they continue to deal with cash flow and profitability issues given the bitcoin price crash. These losses are also heavily featured in their stock prices. For Marathon Digital, its stock price is down from its $83.45 year-to-date high to be trading at a current price of $6.87 at the time of this writing. This shows an 81% drop in the last year alone.
BTC losses momentum and falls to $21,000 | Source: BTCUSD on TradingView.com
Nevertheless, Bitcoin block production is on the rise once again. It is now sitting at 6.23 blocks produced per hour compared to the 5.86 blocks per hour from the previous week, representing a 6.19% increase. However, miner revenues remain muted with a 0.76% drop in the last week.
Related Reading | Bitcoin Holders To Remain Cautious As Correlation With Stocks Continues
With the prices falling, bitcoin miners stand the risk of losing more of their cash flow. It is predicted that if the current bear market continues, a good number of miners would fold up due to the inability to fund their mining activities.
Featured image from Coingape, charts from Arcane Reseach and TradingView.com
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