The bitcoin bear market has impacted miners and as a result, several of them are looking to consolidate their operations to regain their profitability.
This may be a prime decision, especially in light of the fact that the market has caused around 100,000 digital miners to shut down. Further, according to Global Advisors LLC has reported that about 1.4 million servers have closed.
Malachi Salcido of Wenatchee stated,
“We are entering in the phase when there’s flushing out of the market. There will be relatively few options that come out the other side.”
The big point to understand is that for miners to be profitable, bitcoin would need to trade over $4,500.
Thus, there are very few miners who are able to stay in the mining business. The main miners that are remaining in the market are those who are able to scale and who are able to maintain low energy costs. Those who have succeeded to remain on the market have been able to earn Bitcoin in a less competitive market.
As for the remaining large-scale miners, their consolidation is risky for investors and others who have a vested interest. Such miners could do a 51-percent-attack, which means that they’d be able to reverse transactions and to prevent new ones from confirming. There have been some platforms that have experienced these attacks, such as Bitcoin Gold and ZenCash. Their investors have lost millions of dollars.
Fundstrat note published a report last week, stating,
“We note that the BTC price would need to re-accelerate substantially for mining to once again become self-funding and it has been for most of Bitcoin’s history.”
Salcido’s platform has been relatively successful at overcoming the bitcoin downturn. Salcido gave credit to his business model and the low energy costs and he stated,
“I expect when we are at to possibly get a little worse before it gets better. Like all market bottoms, smart money is watching for the turn, that doesn’t happen usually quickly. It wouldn’t surprise me if the bottom is finally in February.”