8 Sep

Bitcoin Mining to suffer impact from current downturn

The recent stumbling block in the price of the most important of the crypt coins, could have consequences in the extraction of the same. In this sense, Bitcoin mining will suffer the strong impact of the downturn and, at the same time, the price drop could be extended as a consequence of that impact.

This is not a play on words. In theory, you could create a circular reaction in which the price affects the performance of Bitcoin mining and that performance would have the ability to accentuate the downward trend of the digital currency.

Consequently, this would be the worst case scenario. Although it’s likely to happen, it should be noted that this is not the only possible scenario. But what are these stages that business in general could reach with the recent fall?

Impact of Bitcoin price on mining and vice versa

As already published in CryptoTrend, the fluctuation in Bitcoin’s price has a direct impact on digital mining. An emblematic example was witnessed in March with the drop in the value of the pioneer cryptcoin to less than $4,000 per unit.

At that time, equipment such as the S9, stopped being profitable, so disconnections began to occur. This capitulation caused the hash rate to drop. At the same time, it caused the miners‘ operating expenses to be higher in relation to their hoarding.

As a result, the revenues from Bitcoin mining, being lower, were consumed in the maintenance costs of the farms. Thus, large sums of BTC were exchanged in the exchanges, causing a supply effect and, as a consequence, further accentuating the price drop.

Current fall in the price of BTC

In recent days, the price of the most popular of digital currencies, flirted with the $ 12,000 USD. However, it quickly began to fall back more than expected to $10,235 at the time of writing.

Keeping up with this, those who run the Bitcoin mining business began to increase the flow to the exchanges. In the last few days, this trend is beginning to worry the bullish side.

According to CryptoQuant data, the flow of crypto currencies to the exchange platforms has increased significantly since Wednesday, September 2.

The firm takes three of the most important Bitcoin mining groups as the basis for its study. These are Poolin, Sloosh and HaoBTC, whose Bitcoin outflows were more than 1,600 BTC or $18.5 million on Wednesday alone.

With these volumes, it’s almost certain that Bitcoin mining will inevitably be impacted by the current price movement.