In the past few weeks, Bitcoin (Bitcoin) The mining market has experienced a black swan event, which has led to many uncertainties and confusion surrounding the future of the market. This is why I think it is right to provide quick updates to the public and explain why now is the perfect time for Bitcoin mining in the United States.
Bitcoin miners receive Bitcoin rewards for protecting the network and every block they mine. As more miners participate, the difficulty increases, and the reward for each miner’s safety contribution decreases. The reverse is also true. When there are fewer miners participating, the difficulty decreases and the reward for each miner’s contribution increases. Understanding this is the key to explaining why this is an exciting time to enter the mining industry.
Recently, we have experienced a historic decline in the difficulty rate. This chart shows the initial impact of Chinese miners being forced to close and move out of China.
There are many potential reasons for this situation, but the final result is that Chinese miners and their equipment have begun to flow out.As of July 2, the exchange rate is adjust -27.94%.This is the fourth time Negative adjustment Continuous, “Since mid-May, the difficulty has almost halved.”
Let’s take a look at the most recent block interval.
Even if the price of Bitcoin hits a record high, we still expect to further reduce interest rates in the near future.
However, the decline in difficulty is not over at this time. With an additional drop of more than 27% in early July, the fluctuations continue as the network catches up with the impact of all these miners offline. These events have brought many dramatic and rapid changes to the crypto mining market, but their impact can be boiled down to three main changes:
- There is a lack of low-cost power mining sites and power infrastructure in the market. There is simply not enough infrastructure to absorb the demand from Chinese miners.
- Equipment prices are falling rapidly, and the profitability of miners is increasing. We estimate that given the proliferation of equipment, equipment prices will fall to historical lows, and the profitability of the mining industry will soar. Therefore, we expect that mining profitability will increase by 35% after the difficulty adjustment.
- Cheap power locations may take a year or more to negotiate, contract, and develop. In view of these circumstances, current operators have unique opportunities because they have established available resources and partnerships.
The last time the difficulty factor was about 15 trillion was in January 2020, when the value of Bitcoin was only $7,000. Currently, the price of BTC is approximately US$32,000, which is more than four times higher. With low-priced mining hardware and the high price of Bitcoin, the opportunities for Bitcoin mining have never been better. Now, this is not about mining equipment, but about infrastructure.
All investors know that the time to invest is when the cost is heavily discounted. For Bitcoin mining, it is now.
This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should research on their own when making a decision.
The views, thoughts, and opinions expressed here are only those of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.
William Somerset Is the CEO and founder of Sazmining Inc., a cryptocurrency mining developer and consulting company, and All crypto mining: Sazmining podcastHe is optimistic about the future of Bitcoin as the world’s major digital reserve asset, and believes that Bitcoin is the first layer of sound currency solutions. William grew up in Maryland and studied psychology and management at Bucknell University. William uses his spare time to exercise, meet friends and read.