Cryptocurrency news

Leo Zhang: "miners need to think through their business due to the imminent halving of the reward»

Leo Zhang: “miners need to think through their business due to the imminent halving of the reward»

According to the Chairman of Iterative Capital Management, Leo Zhang, miners need to think carefully about their business, since in six months the reward for mining will be halved.

Zhang stressed that although many analysts believe that the bitcoin exchange rate will rise after the mining reward is halved, no one really knows what exactly will happen. Despite all the Analytics, the bitcoin exchange rate is closely related to the network hashrate, and if some miners leave the industry after the reward is halved, the bitcoin price may even decrease.

At the same time, according to a study by Iterative Capital, after halving the reward for mining, the bitcoin exchange rate will exceed $17,000. Now, when using Whatsminer M20s devices and paying for electricity at 3 cents per kWh, the cost of bitcoin mining is $7,000. Accordingly, if miners produce half as much bitcoins, the cost will reach $14,000, and if the electricity fee increases to 7 cents per kWh, the cost will exceed $17,000.

“Previously, people just did whatever they wanted, but there was a profit. Now they need to be more disciplined, ” Zhang said.

The Chairman of Iterative Capital Management highlighted several ways for miners to stay profitable. However, there will be no revelations: you need to buy equipment at the lowest price, and also try to reduce the cost of electricity and other operating expenses. At the same time, companies need to provide themselves with a supply of electricity, or money, so that in the event of a possible decline in the bitcoin exchange rate, they can survive this drawdown.

“In fact, there is no truly effective way to hedge these risks. All you can do is reduce your expenses as much as possible,” Zhang concluded.

Recall that recently the canadian mining company Great North Data, which is engaged in bitcoin mining and manages several data centers, declared bankruptcy. At the same time, the company still has significant debts to creditors.