Big Bitcoin Miners and how they Manage to Survive the Bear Market

Jenson Nunez
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Big Bitcoin Miners and how they Manage to Survive the Bear Market

Counting on cheap electricity is a great advantage when carrying out activities during bear markets. Showing a low debt/equity ratio also benefits the permanence of mining entities.

Bitcoin (BTC) miners got forced to face new adaptation behavior after the entire crypto market went through a price decline that is still active and damaging to investors. The increase in mining got also included, which minimizes the performance of the hardware to keep the Bitcoin network in constant and fluid work.

For better or worse, two factors profoundly impact the solidity of a Bitcoin mining entity during bear markets: the electricity cost and solvency regarding its financial operations.

The price that the administration of a country or a private entity establishes for the electricity is beyond users’ control. However, there are new alternatives that Bitcoin miners can execute to fight against the blows that the bear market may be taking on their financial structures.

One of the possible solutions, and the simplest, is to use hardware that mines more efficiently and even configure it at the software level to optimize your work even more. A recent report by Arcane Research compares the cash flow, or cash flow, per bitcoin offered by mining with an Antminer S19 and an Antminer S9.

Investing in updated hardware makes the profitability of mining reach high peaks because the advancement of technology allows them to carry out mining activities with greater potency using less energy.

Starting and growing a mining entity requires a lot of investment in infrastructure. This situation often obliges owners to opt for loans and other financing tools to achieve their goals. The real struggle comes when payments begin to disappear or when the decline in profitability generates expenses that might surpass net profits.

Evaluating each financial commitment that the company considers acquiring is crucial, and these are approved if they are essential for its support and growth. In this way, if the market goes through a bearish stage, the chances of overcoming a situation like this one and generating profits are more extraordinary.

The Best Prepared Mining Companies to Fight against a Bearish Market

The Arcane Research report talks about the Bitcoin mining entities that, according to them, are well equipped to resist the subsequent downtrend that the market is going through.

According to Arcane Research, Riot Blockchain appears to be the most prominent entity in the face of the low profitability that Bitcoin mining presents today.

Riot Blockchain is the entity that counts on the cheapest electricity service on the list. Paying just $24 per MWh allows Riot to save around 30% of what Hut and Core Scientific (other companies in the industry) spend on electricity. This situation already relies on a significant advantage in profitability regarding BTC mining because it is an activity that needs a huge amount of energy.

Another factor to consider is that Riot Blockchain goes far beyond other mining entities in the solvency of its finances, according to data brought by Arcane Research. The debt/equity ratio shows how solvent an entity should be when it comes to financing its assets. The higher this value, the greater the risk of its investors and shareholders, so Riot, with 0.1 in its debt/equity ratio, looks like the most reliable company in this regard.

By: Jenson Nuñez

Current Proliferation of Web3 Technology Looks Like the Rise of First Internet, Netscape Creator Says

Audy Castañeda
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Current Proliferation of Web3 Technology Looks Like the Rise of First Internet, Netscape Creator Says

Billionaire tech entrepreneur Marc Andreessen says the current proliferation of Web3 and Blockchain technology resembles the Internet of the late 1990s.

Billionaire tech entrepreneur turned venture capitalist Marc Andreessen says that Web3 and its underlying Blockchain technology remind him of the rise of the first internet.

Andreessen, best known today as a co-founder of the Blockchain-focused venture capital firm Andreessen Horowitz (a16z), initially succeeded in developing the first widely used web browser, called Mosaic, and later founded Netscape Navigator, which dominated the browser market for much of the 1990s.

Andreessen’s Podcast

On the Bankless podcast, along with his partner and colleague Chris Dixon, Andreessen stated that the rise in Web3 development and adoption closely resembles the activity of his early years in the tech world.

Andreessen insisted that he would not make this type of comparison arbitrarily and that it was the first time he had made such a claim:

“It’s the only time I’ve said that this: [Web3] is like the Internet. If you go through all of my historical statements, one would imagine that in my experience I could have said this about 48 times. I had never made the comparison.”

He further claimed that, “I’ve never said that about any other type of technology because I wanted people to know that I don’t take the comparison lightly.”

Although crypto enthusiasts have often drawn parallels between the adoption trajectory of Blockchain technology and the early days of the Internet (much to the chagrin of crypto critics), Andreessen’s front-line experience gives him a unique authority to make such statements.

He added that the current Web3 landscape attracts the world’s smartest people:

“The easiest way to think about it is when you have something like this that has a movement, that has this kind of collective effect and a movement behind it, and it’s attracting a lot of the smartest people in the world to work on it. Because of this, basically, the critics play differently than the critics think.”

Andreessen said that the Web3 technology is the Internet’s “missing” link, bringing trust, sovereignty, and financial utility to the ecosystem:

“We lacked […] trust, authority, and permission. We lacked the ability to negotiate with people to establish relationships of trust, to transact, to send money, to store money, and then to have all the other economic arrangements that the world wants to have, [like] loans and contracts and insurance and all these things. .”

About a16z

Previously known for its early investments in Instagram and Slack, a16z first entered the crypto industry with an investment in Coinbase in 2013 and has since backed major crypto-related companies including Polychain Capital, OpenSea, Solana, Avalanche, and Yuga Labs.

A week ago, the company announced the launch of its fourth cryptocurrency fund with $4.5 billion, bringing the total amount of capital invested by Andreessen Horowitz in crypto businesses to just over $7.6 billion.

According to a letter written by managing partner Chris Dixon, a16z launched the latest fund to capitalize on what Dixon calls the “golden age” of Web3 development.

Andreessen concluded the podcast with a succinct explanation of why a16z is pouring so much money into the industry:

“We could actually imagine the entire world economy running on the Blockchain in like 30 or 50 years.”

By Audy Castaneda

The Economist: Investors’ Perception of Cryptocurrencies is changing for the Better

Audy Castañeda
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The Economist: Investors’ Perception of Cryptocurrencies is changing for the Better

Investors see cryptocurrencies as increasingly useful as the portfolio diversifies, according to a report by The Economist on consumer confidence in digital currencies.

A report published by The Economist portrays a bright future for cryptocurrency adoption, as respondents anticipate increased demand in the near future.

Economist Impact has published the results of its “Digitalization Report”, in which it delves into consumer confidence in digital payments and the obstacles that have prevented the digitization of basic monetary functions. The data obtained give rise to reflection and perspective since the trends of previous surveys on the subject carried out in 2020 and 2021 are compared.

Data Collection for the Report

The information was collected via a survey of 3,000 consumers in early 2022, half of whom lived in developed economies such as the United States, United Kingdom, France, South Korea, Australia, and Singapore. The other half were respondents from developing countries, such as Brazil, Turkey, Vietnam, South Africa, and the Philippines.

About 75% of the participants had higher education and had used various digital payment methods to pay for goods or services. In the last part of the survey, 150 institutional investors and company treasury managers participated, which allowed know the attitude of the conventional financial system in general on the subject.

One of the main conclusions was the prevailing opinion of investors, who agreed that open source cryptocurrencies, such as Bitcoin (BTC) or Ether (ETH), are useful as a diversifier in a portfolio or checking account.

Eighty-five percent of respondents held this view, while nine out of ten institutional investors and corporate treasury respondents indicated that demand for all cryptocurrencies, including CBDCs and enterprise Blockchains, has increased over the past three years.

Report Main Findings

The report indicated that the rise of Web3 and different projects related to the metaverse may increase this demand. 74% of respondents also agreed that non-fungible tokens (NFTs) are an emerging asset class that organizations plan to acquire and trade.

Central bank digital currencies (CBDCs) were another notable point of attention, with a growing number of consumers expecting their respective governments or central banks to launch a working CDBC system by 2025. 65% of executives who participated in the survey believe that CBDCs are likely to replace physical fiat currencies in their countries of operation.

Regulation was identified as the main obstacle preventing institutional investors or company treasuries from using cryptocurrencies. Market confidence or understanding of the space was cited as an obstacle by 35 percent of respondents – a marked decline in perception from 47 percent in the 2021 study.

This echoed the views of US Treasury Secretary Janet Yellen, who reeled off her comments on digital asset policy and regulation in May 2022. She pointed to the barriers that limit access to cryptocurrencies, among which are financial education and technological resources.

Studies have shown that only 33% of adults worldwide are financially literate. Thus, it seems that a necessary educational component is an education in cryptocurrencies and Blockchain. It should be noted that new technology of all kinds can be overwhelming and confusing to potential new users, which is why technological simplification for end-users should be a priority for developers.

By Audy Castaneda

Daily Bitcoin Mining Revenue Plummeted in May to its Lowest Level in Eleven Months

Audy Castañeda
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Daily Bitcoin Mining Revenue Plummeted in May to its Lowest Level in Eleven Months

Bitcoin miners have had a tough month as revenue and profitability have dropped in May. However, hash rates are still high.

Bitcoin (BTC) mining revenues and profitability have continued to fall along with the price of the asset this year as the crypto winter deepens.

May has been one of the worst months for Bitcoin miners in the past year as revenue and profitability continue to fall. Daily Bitcoin mining revenue decreased as much as 27% in May, according to Ycharts data sourced from Blockchain.com.

On May 1, the analytics provider reported daily revenue of $40.57 million for BTC miners, but by the end of the month, it had fallen to $29.37 million. On May 24, daily mining revenue hit an eleven-month low of $22.43 million.

Daily mining revenue peaked at about $80 million in April 2021 but has since fallen 62% to current levels.

It is worth recalling that back then, coal mine accidents and subsequent inspections in Xinjiang lacerated the power supply to the regional cryptocurrency mining industry, which forced miners to turn off their application-specific integrated circuit (ASIC) hardware, which exclusively generates computing power to secure and put “work” into Bitcoin’s proof-of-work.

Public Reactions

In a tweet post, @zackvoell, interested in Bitcoin mining and markets, claimed that, “May ended the streak for miners. Every month since August 2021 saw cumulative mining revenue above $1b until now. Last month’s mining revenue: $906m.”

Mining profitability, which is a measure of daily dollars per terahashes per second, has hit its lowest levels since October 2020, according to Bitinfocharts. The cryptocurrency metrics provider currently reports a mining profitability of $0.112 per day for 1 Th/s.

Additionally, the metric has seen a 56% decline since the start of the year and is down more than 75% from the 2021 highs of $0.450 per day per Th/s.

However, Bitcoin network hash rates remain high, with the current daily average standing at 211.82 exahashes per second, according to Bitinfocharts. The figure is down about 16% from its all-time high of just over 250 Eh/s on May 2.

High hash rates but low profitability may suggest that there is a much higher level of competition in the Bitcoin mining sector than previously seen. In previous bear markets, miners shut down their equipment when the price of the asset fell and trades temporarily became unprofitable.

Glassnode: “Falling Revenues”

According to Glassnode, flows from miners to exchanges just hit a four-month high, suggesting they may be making preparations to sell some coins to cover falling revenues.

On a Tweet, @glassnodealerts, an account that monitors interesting movements of on-chain metrics and exchange flows for $BTC, $ETH, $LTC, and #ERC20s, stated that, “Bitcoin $BTC Miners to Exchange Flow (7d MA) just reached a 4-month high of 6.188 BTC. A previous 4-month high of 6.002 BTC was observed on 07 April 2022.”

In general terms, the cryptocurrency market appears to remain at the mercy of the stock market. While the stock market has mounted a modest rally during the May 23 session, all four major indices are in or near bearish territory. We can only expect any bearish or bullish price action in the stock market to be reflected in the cryptocurrency market.

By Audy Castaneda

A YouTuber Loses USD 200,000 after Buying BTC in Early 2022

Alexander Salazar
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A YouTuber Loses USD 200,000 after Buying BTC in Early 2022

Investors like famous YouTuber NasDaily have lost money but maintain their bullish conviction about the pioneering cryptocurrency. Over the last few days, he has bought three more BTC even though his Bitcoin holdings have depreciated by 40%.

Due to the drop in the price of Bitcoin (BTC), the wallets of some traders are in the red. Rather than earning a profit, those buying the cryptocurrency when it was worth USD 40,000 are suffering losses. Some are more significant than others, depending on investment by people like famous YouTuber NasDaily.

At the end of the first quarter of 2022, NasDaily (Nuseir Yassin) first bought USD 500,000 in Bitcoin at USD 40,000. In late March, he posted a video before the cryptocurrency reached its 2022 high of USD 48,000 and its strong bearish trend began. Almost two months after that entry, BTC is worth around USD 31,658.

After the price dropped, his investment became USD 300,000, a depreciation of 40%. However, he did not stop his long-term bullish thinking about the cryptocurrency, stating it is clear proof of his conviction.

The famous YouTuber confessed that he is buying more Bitcoin instead of selling his holdings. Due to his initial purchase of just above 10 BTC and the drop, he has acquired three more BTC. When he announced his first investment, he said he would buy more even if prices fell.

That long-term holder believes that it is time to have a bullish conviction for the upcoming twelve months. Following advice from Warren Buffet, he said that investors should be fearful while others are greedy and vice versa.

The current Fear & Greed index indicates that the market sentiment is now of extreme fear on a scale of 10 out of 50. Amid that context, the YouTuber is sure that the adoption of cryptocurrencies will grow further as it revolutionizes money. Referring to Bitcoin and other crypto-assets like NFTs, he estimated it is the first time people can own a part of the Internet.

NasDaily Says Cryptocurrencies Opened His Mind to Current Problems

Despite the bearish tide in the market, the YouTuber began to make content about cryptocurrencies in addition to buying Bitcoin. He pointed out that this revolution shaking the world entraps him and considers it relevant to convey that to his followers.

He said that cryptocurrencies opened his mind to current problems and how people can solve them. He explained that this excites him and thinks he should educate his audience about it.

During an interview, Changpeng Zhao, the CEO of Binance, told him he had created his businesses as he believed that cryptocurrencies were the future. He believes that crypto assets will become a usual payment method within twenty years, even though they have not yet replaced fiat money.

BTC is trading at around USD 31,658 and has accumulated a 4.2% gain over the last 24 hours. While its daily trading volume is above USD 31 billion, its market capitalization is about USD 604.75 billion, according to CoinGecko.

By Alexander Salazar

Now South Korea will Investigate all Terraform Employees for UST Crashdown

Jenson Nunez
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Now South Korea will Investigate all Terraform Employees for UST Crashdown

South Korean prosecutors released an investigation into all Terraform Labs employees following the crash of the UST.

South Korea is a nation that has not stood still after the crash of the Terra stablecoin, UST, which caused a general disaster in the market. It has already taken several procedures: Last week, South Korean law enforcement authorities executed protocols to suspend the circulation of the assets of the Luna Foundation Guard (LFG). This organization brings back up to the Terra ecosystem.

In addition, he had a meeting with the country’s exchanges to assess their responsibility and protection of users during the crash. He also started investigations into Terra’s founder, Do Kwon.

According to the news brought by local media, South Korean prosecutors started a thorough investigation of Do Kwon and Terraformed Lab employees. The joint financial and securities crime investigation team of the Seoul Southern District Public Prosecutor’s Office summoned company employees to discover if they were aware that a collapse was possible before it all took place.

A big Failure

The report says prosecutors managed to get a statement from a whistleblower who highlighted some reservations against releasing Luna and Terra because the pilot model failed within the entity at the time. Prosecutors believed the item got launched and traded despite this situation.

Prosecutors are also investigating whether Do Kwon influenced over prices and whether the item went through an appropriate listing review procedure. Employee questioning could paint new panoramas of what happened behind the curtains and whether those leading the project were genuinely aware that things could inevitably fail.

According to media reports, the number of people issuing legal complaints against Terraform and Do Kwon keeps increasing. Tons of lawsuits got already filed against those connected to the Terra project. Lawmakers have also entered the fray, intending to pay attention to Kwon before Congress, and law enforcement warned local exchanges to freeze assets that might come from the Moon Foundation Guard.

Terra’s Ecosystem is in Deep Trouble

Those responsible are currently working hard to deliver many strategies to get back into action, but it does not seem that it will be easy.

Terra launched Luna 2.0 to restore the Terra ecosystem equilibrium. It did not work out the way they wanted, as the new LUNA token crumbled down by almost

80% after its release. Many investors appear to get sold to recover some of their losses during the incident.

On the other hand, some South Korean exchanges are wary of listing the new LUNA token. The team could defend that Terra 2.0 is the birth of a new blockchain, but investors appear to be doubtful about it.

Despite the post-launch drop and today’s news, Luna is recovering slightly, with a current cost registered at 12.10%. However, it was still around $6 when released with prices near $20.

By: Jenson Nuñez

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