Bitcoin (BTC) crossed the $20k mark twice in September 2022 before falling again. Regardless of the "September effect," or the month which has historically performed poorly, the crypto markets suffer from several external factors. Miners are struggling as profitability plummets.

Bitdeer Technology Holdings is raising $250 million, according to Bloomberg, to acquire assets from troubled miners. Bitdeer is a cryptocurrency mining company led by crypto tycoon Jihan Wu. The firm has already made a $50 million junior tranche investment and intends to raise another $200 million from other sources.

Bitdeer CEO Matt Kong stated,

“We can buy the cheaper machines and run them in our existing facilities with stable and cost-effective power purchase agreements.”

The availability of low-cost machines attests to Bitcoin mining's declining profitability.

Not only that, but other Bitcoin (BTC) mining companies saw their stock prices rise, only to fall again. Hut 8 Mining, Marathon Digital Holdings, and TeraWulf all gained 10% to 11% yesterday. The surge, however, did not last, and they fell to 1.8%, 2.7%, and 5.7%, respectively.

Will there be any relief for Bitcoin (BTC) mining anytime soon?

Miners have been eager to sell their equipment in 2022 for various reasons. For starters, the bear markets have made mining significantly less profitable. Second, Ethereum's switch to a PoS (Proof-of-Stake) model eliminated the need for miners entirely. The same is true for GPU prices in used markets. GPU prices have fallen as a result of the influx of low-cost equipment.

Furthermore, Bitcoin's difficulty peaked in September, while revenues remained flat after falling since last October. The hash rate is also increasing. This is not an ideal situation for high profits.

Furthermore, the world is currently facing an energy crisis, particularly in Europe. Russia may cut off its natural gas supply to Europe as a result of the ongoing sanctions imposed on it for its invasion of Ukraine. This will result in a massive increase in energy costs. As energy is a fundamental requirement for mining, this should ideally be reflected in Bitcoin's price.

Posted 
Sep 28, 2022
 in 
Crypto News
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