Home miners can relocate without problem to regions with cheaper electricity. Larger entities get locked into energy arrangements with providers, limiting their functionality. Some home miners in the U.S. are migrating to areas with renewable energy.
Home miners in the U.S. are looking for new alternatives to circumvent high energy bills in the face of increasing prices and the fall of the crypto environment.
The smaller operators also suffer the side effects in the bearish moment the crypto market goes through but can adapt more quickly, according to veteran home miners.
While entities like Bitfarms and Core Scientific have had to sell bitcoins to strengthen liquidity in markets where profits are getting more compacted, independent miners can pack up their tools and migrate to other regions to shelter the income.
For most prominent miners, relocation means a lot of logistical and financial challenges. These large miners usually get locked into long-term contracts with electricity providers, which can bring electricity services at costs with an affordable degree. In contrast, smaller operators have the benefits of tapping into residential charges.
Many Ways for Miners to Make Profits
Some miners have a combined experience in small-scale crypto mining. These miners carry out their mining activities on a larger mining farm based on their homes in regions with affordable electricity. These miners believe that smaller miners have fewer overheads and more advantages than larger ones.
The relocation of home miners within the U.S. is evidence of this current situation. While the U.S. administration predicts that electricity prices might present a slight increase registered at 5% in the summer, the distribution of the electricity charges increases is not uniform.
Electricity charges in southwestern states are only likely to increase its rate by 2.4%. On the other hand, the six New England states can wait for at least a 16.4% increase in electricity costs, according to the U.S. Chamber of Commerce.
Some Bitcoin miners are looking for renewable energy sources to lower electricity costs as the best alternative. Miners in mid-western states are moving to Illinois or Missouri, where wind energy is plentiful, while miners in Florida are turning their interest toward solar energy.
Selling Equipment Might not be the Best Option to Avoid Losses
Others are selling their old equipment to collect funds. However, this selling gets limited to those looking for a rapid exit from crypto after purchasing expensive tools during last year’s bull market. Some equipment is for sale for as little as $300 on platforms like eBay.
The price of the equipment may drop further. Last month, the prices of mining equipment halved, following the downward trend of the first crypto asset. Large miners keep selling their bitcoin holdings. In that case, lenders could decide to liquidate their ASIC-backed loans, leading to a price downtrend.
FTX boss Sam Bankman-Fried expressed concern and pointed out that mining entities would be unable to repay debt and could contribute to the spread of credit contagion that has harmed lenders Celsius and BlockFi.
By: Jenson Nuñez
