Bitcoin Mining Profitability Will Decline, But Maintaining Network Security is the Main Concern
With more than 87% of bitcoin mined, the miners’ revenue is expected to “decrease” yet again, said Chun Wang, the co-founder of F2Pool, the second oldest mining pool that has been in the market since 2013. It has its BTC servers in North America, Northern Europe, and Russia as well as in Asia including China, Hong Kong, and Singapore.
They have been working fully remote since the start of the COVID-19 crisis.
The profitability of the miners is yet again turned positive after inefficient miners were replaced by efficient ones and the price made some recovery. But Chun’s main concern still lies in the needs of miners to maintain bitcoin network security.
Bitcoin’s hash rate is currently recovering fast from its recent drop after the price crash, showing a clear upwards trend as we approach the halving.
From its lowest day in March, the hash rate of the bitcoin network has jumped 64%.
However, besides the hash rate, the stability of the machine is another important aspect of an ASIC miner, said Johnny Yao, the Overseas Sales VP of Bitcoin miner manufacturer Canaan.
“One or two failures of a machine can make a big difference in miner ROI,” he said. And to keep the mining profitability, a miner chooses suitable new generation miners that can mine for the coming 1-2 years.
Opportunities to profit from arbitrage
Bitcoin halving is coming next month while its fork Bitcoin Cash (BCH) already had its halving last week that has Bitcoin capturing over 99% share of the SHA-256 hash rate.
According to Discus Fish, co-founder of F2Pool, “there will be short-term opportunities to profit from arbitrage.”
As such, they have been conducting a long-term internal test of the performance of the SHA-256 profit-switching pool and they will be launching one soon.
BTC bull market will begin once again
The world’s leading cryptocurrency is keeping above $7,000 after falling below $6,500 yesterday, following the stock market. This correlation with the equities market suggests Bitcoin is still a “risky” asset class. Ye Mao (Night Cat), the CEO of CoinSummer said,
“Future bull and bear markets will occur cyclically, and this bear market is mainly caused by the COVID-19 crisis.
We need to wait for the epidemic to pass, the global economy to recover and the BTC bull market will begin once again.”
In order to get through the bear market, Ye Mao said that miners need to consider future mining revenue and implement correct hedging techniques to offset any risk. He said,
“The priority of the mining industry is to survive, and after we survive, there will be many opportunities for success.”