Bitcoin mining, like the rest of the cryptocurrency industry this year, has taken a serious hit. As we approach 2023, with the hope that the market will flip and crypto prices will recover, industry analysts predict that Bitcoin miners will continue to face hardships.
More and more enterprises will need to be vertically integrated by 2023, with their own power supply, in order to ensure long-term steady operation in the face of the halving, as cryptocurrency mining becomes an increasingly significant component of the energy market. For Bitcoin miners, the approaching halving is bad news. After the Bitcoin halving, miners’ block rewards would be drastically decreased.
What Experts Are Saying
Bitcoin mining experts are saying that it’s unlikely for the sector to get relief any time soon. The Chief Executive Officer of the Canadian mining company Hut 8 (HUT), Jaime Leverton, recently said in an interview with the media outlet CoinDesk that the worst is yet to come in terms of capitulation and bankruptcies, especially in the first half of 2023, and that she is unsure whether or not relief will come in the second half of the year.
According to Fiorenzo Manganiello, the founder of Cowa, a mining and venture-funding organization, purchasers would be better off simply acquiring bitcoin rather than dealing with the headaches of owning and managing devices to mine cryptocurrency.
Analyst at bitcoin mining service provider Luxor Technologies Jaran Mellerud believes that miners would utilize 2023 to fortify their financial positions and increase their operational efficiency unless a full-scale bull market occurs, which he also predicts is unlikely.
Glassnode’s numbers show that Bitcoin mining profit has been falling steadily over the previous several weeks. The selling pressure on miners would of course intensify if their income continues to fall.
On the other hand, Pierre Rochard, the Bitcoin Strategist at the cryptocurrency exchange Kraken, said not too long ago that the bitcoin mining income of December has returned to the level it usually is before the halving. In his analysis, he presented a chart that showed the daily average income generated by bitcoin mining from 2016 until 2022.
In contrast to prior years, the miners’ income has been quite low. In 2015, bitcoin mining profitability reached an all-time high of roughly $3.00/TH per second. But by 2022, the value has dropped to less than $0.104/TH per second.
Given that these experts have predicted no respite for miners in the near future, it seems like it’s going to be a rough year for the sector.
They had the best buckle up for the next twelve months because it’s likely going to be a rough one.