A North American Bitcoin mining operator Bitfarms shared that they continued to mine BTC despite the violent sell-off triggered by investors’ fear over the COVID-19. Interim CEO and Chief Strategy Officer, Emiliano Grodzki said,
“We are pleased to see that, despite the challenges to traditional markets, our scale and quality of operations has allowed us to continue to generate positive cash flow in these difficult times.”
From the price drop to the recovery of the price to $6,000, the company maintained an average daily hashrate of approximately 630 petahash per second which again increased to about 750 PH.
By reducing the staff temporarily in line with government guidance and implementing permanent measures to reduce overhead costs, they are looking to cut down their expenses by 20 to 25%.
According to John Rim, the CFO, they will be “best positioned” to withstand the short-term volatility and remain profitable come halving.
Significant Percentage of Bitcoin Miners can still Exit
In the past few weeks, the bitcoin price has recovered from the low of $3,850 hit during the crypto carnage to surging above $7,400 on Tuesday.
As we reported, not just price but network fundamentals have also been showing recovery signs. Bitcoin miners have turned profitable yet again and more than 34% more hash has been added in just over two weeks, meaning new rigs have been added to mine BTC.
A couple weeks ago, Bitcoin's hashrate began to fall rapidly.
So what did Bitcoin do?
It automatically lowered mining difficulty, miners increased their mining capacity, and now Bitcoin's hashrate is storming back towards new all-time highs.
No bailouts required pic.twitter.com/VARHJ0NxWe
— Shakepay – Buy/Sell Bitcoin (@shakepay) April 3, 2020
Recently, on-chain analyst Willy Woo shared bullish miner charts, with the Hash Ribbon and Miners Energy ratio recovering. According to him, the 45% drop in hash rate in March saw some miner capitulation and now he isn’t expecting any more sell pressure from miners.
However, according to Matt D’Souza, Hedge Fund Manager and CEO of Blockware Solutions, a crypto mining service, it is likely that a meaningful percentage of inefficient miners will still be removed from the bitcoin network. However, he advised keeping the demand side in mind as,
“price is made up of supply & demand. Inefficient miners can remain if the funds & hodlers (demand side economics) counter-balance sell pressure by raising new fiat into the system. Bitcoins fundamentals are better than ever.”
Overall, it all depends on the if price and if Bitcoin price continues to move higher, all the miners will be operating at healthy margins, that is until either difficulty pulls back or price corrects. D’Souza said,
“Sustaining margins for the long term determines inefficient vs efficient miners.”
Come halving next month, the miner flow will cut down in half from 1800 BTC per day to 900 BTC per day. In order for the miners to remain profitable, the BTC price needs to rise as the cost of mining one BTC will surge between $12,000 to $15,000.