Bitcoin miners increased hash rate and production despite falling BTC prices in 2022
23 December 2022 18:41, UTC
Studying time: ~2 m
The worth of Bitcoin (BTC) fell by 64.68% to $16,870 from round $47,766 initially of the yr, Crypto knowledge reveals. On the identical time, share costs of Bitcoin mining firms fell by 91% on common from their 52-week excessive costs, in keeping with Compass Mining.
Nevertheless, this has not deterred mining companies from growing their Bitcoin mining capabilities all through 2022, as per a Compass Mining report. CleanSpark, as an illustration, grew its BTC mining hash charge from 1.9 EH/s in the beginning of 2022 to six.0 EH/s or about 62,000 miners so far — a rise of 189%, the Compass Mining report acknowledged.
Bit Digital and Riot Blockchain bumped their hash charge by 157% and 148%, respectively. Moreover, in keeping with the report, Bitfarms, Digihost, and Marathon Digital Holdings every elevated their mining hash charge by 100%.
The growing mining capabilities inevitably led to elevated Bitcoin manufacturing all through 2022. For instance, Riot Blockchain has mined 4,872 BTC as of November 2022 in comparison with 3,812 BTC and 1,033 BTC produced in 2021 and 2020, respectively.
CleanSpark has produced 4,157 BTC year-to-date in comparison with 1,528 BTC mined in 2021, as per the report. On Dec. 21, Bitfarms introduced that it had mined its 5000th BTC in 2022, forsaking its document of mining 3,452 BTC in 2021.
Miners purchased BTC in a bullish spirit, then bought them amid a liquidity crunch
In early 2022, regardless of Bitcoin slipping far under its all-time excessive of $69,000 set in Nov. 2022, miners had been nonetheless bullish available on the market, the Compass Mining report acknowledged. Due to this fact, many miners proceeded to make use of their money reserves to buy BTC along with mining them.
Within the first week of January 2022, Bitfarms introduced the acquisition of 1,000 BTC for $43.2 million, growing its BTC holdings by 30%. Within the second half of January, Argo Blockchain purchased 172.5 BTC.
Bitfarms bought 7,309 BTC in 2022, together with the 1,000 BTC bought in January, whereas Argo Blockchain additionally bought most of its BTC at a lot decrease costs. Each companies additionally borrowed massive sums — Bitfarms entered right into a $32 million mining tools financing settlement with BlockFi, whereas Argo Blockchain launched phrases of in depth loans from New York Digital Funding Group — to fund development.
With the bear cycle working full steam, most miners confronted liquidity points. Core Scientific acquired essentially the most brutal hit, main it to declare chapter beneath Chapter 11 on Dec. 21. Greenidge can be present process restructuring so as to keep away from chapter and Argo Blockchain was additionally delisted from LSE amid chapter fears.