Will the Bitcoin Mining Industry Collapse? Analysts explain why crisis is really opportunity
Bitcoin mining involves a delicate balance between several moving parts. Miners already face capital and operating costs, unexpected repairs, product shipping delays, and unexpected regulation that can vary from country to country—and in the case of the United States, from state to state. On top of that, they also had to contend with Bitcoin’s steep drop from $69,000 to $17,600.
Despite the BTC price being 65% down from its all-time high, the general consensus among miners is to keep calm and continue by just stacking stakes, but that doesn’t mean the market has bottomed yet.
In an exclusive Bitcoin miner panel hosted by Cointelegraph, Luxor CEO Nick Hansen said: “There’s definitely going to be a capital crunch in public companies or at least not even just public companies. There’s probably close to $4 billion of new ASIC- are to be paid for when they come out, and that capital is no longer available.”
Hansen elaborated with:
“Hedge funds are exploding very quickly. I think miners are going to take 3 to 6 months to blow up. So we’ll see who has good operations and who is able to survive this low-margin environment.”
When asked about future challenges and expectations for the Bitcoin mining industry, PRTI Inc. advisor Magdalena Gronowska said: “One of the biggest challenges we have faced in this transition to a low-carbon economy and reducing greenhouse gas emissions has been an underinvestment in technology and infrastructure from public and private sector. What I think is really amazing about Bitcoin mining is that it really presents a whole new way to finance or subsidize the development of energy or waste management infrastructure. And it’s a way that’s beyond the traditional taxpayer or electricity payer avenues because this way is based on a purely elegant system of financial incentives.”
Will Bitcoin destroy the environment?
As the panel discussion shifted to the environmental impact of BTC mining and the widespread assumption that Bitcoin’s energy consumption is a threat to the planet, Blockware Solutions analyst Joe Burnett said:
“I think Bitcoin mining is not bad for the environment, period, I think if anything, it incentivizes more energy production, it improves grid reliability and resiliency, and I think it’s likely to lower retail electricity prices in the long term.”
According to Burnett, “Bitcoin mining is a bounty for producing cheap energy, and this is good for all of humanity.”
Related: Texas is a Bitcoin “hot spot,” even as heat waves affect crypto miners
Will industrial Bitcoin mining catalyze the long-awaited “mass adoption” of crypto?
Regarding Bitcoin mining dominance, the future of the industry and whether the growth of industrial mining could eventually lead to crypto mass adoption, Hashworks CEO Todd Esse said: “I think most of the mining going down the road will be held in the middle. East and North -America, and to some extent Asia. Depending on how much they eventually manage to cut off. And that really speaks to the availability of natural resources and the cost of power.”
While it is easy to assume that increasing synergy between major energy companies and Bitcoin mining will give BTC validity as an investment asset and possibly facilitate its mass adoption, Hansen disagreed.
Hansen said:
“No, absolutely not, but it’s going to be the thing that changes everybody’s life whether they know it or not. By being the buyer of last resort and the buyer of first resort for energy. It’s going to transform energy, energy markets and the way that produced and consumed here in the U.S. And overall, it should improve the human condition significantly over time.
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