Bitcoin Mining Market Continues To Draw Interest Despite Various Reports Suggesting Otherwise
Even though the past couple of months have seen a host of news stories suggesting that the Bitcoin Mining industry has been losing traction globally, BTC mining equipment manufacturer, Bitfury, recently announced that it been successful in securing a valuation of $1 billion from billionaire investor Mike Novogratz and Korelya Capital.
The initial funding round comes in wake of Bitfury releasing its Clarke Miner, an ASIC rig that is designed to rival Bitmain’s new 7nm Antminer.
In relation to the matter, Valery Vavilov, the CEO of Bitfury, said that contrary to what many mainstream media outlets have been saying, the demand for blockchain and crypto enabled technologies has shot up quite substantially over the past 11 months or so.
Vavilov then went on to say that:
“We see a lot of demand from companies and public institutions to put their services or products in the blockchain — especially in emerging markets, where administrative systems can be very inefficient.”
Mining Activity Surges Despite Falling BTC Prices
As many may already know, over the course of the past four months, even though the price of Bitcoin has slid quite substantially, the crypto domain at large continues to see an increase in the hash rate of the Bitcoin blockchain network (15 million TH/s to over 50 million TH/s).
As a result of this increase, one can infer that the computing power of the Bitcoin ecosystem has grown steadily since the start of the year— even leading to a stabilization of the breakeven cost associated with crypto mining.
Also, it is worth mentioning that a couple of months back, crypto expert Barclay James mentioned that the breakeven cost of mining Bitcoin around the month of July was around $6,900. This figure was based on the BTC hash rate of the time which was pegged to be around 35 million TH/s. However, since then, the hashrate has risen to over the 50 million TH/s mark.
In regards to the matter, James wrote:
“China has some of the world’s cheapest electricity rates as well as average temperatures consistent with temperate regions. This is important as cooling is one of the largest overheads in mining. In addition, the country’s generally low operating costs also give it a competitive advantage.”
Even though breakeven costs are on the rise, it is worth noting that Bitmain is currently in the process of finalizing its $15 billion IPO. Not only that, a study by Bloomberg also claims that if Bitfury was to issue an IPO today, the firm too would be looking to target a valuation of anywhere between $3 to $5 billion.
Lastly, many mining companies and equipment manufacturers like TSMC and Samsung have remained confident that the mining industry is safe and that the future looks quite bright for this niche’ sector.