Production

Public Bitcoin miners struggle to cope as BTC production declines

The recent bitcoin price drop isn’t the only thing players in the space have had to deal with. It spilled over into other important aspects of the community, such as mining. Both public and private miners have struggled lately with their cash flow plummeting due to bitcoin’s falling value. However, this is not the only problem that these miners have had to face. Mining production has been hit hard for public miners.

Decline in bitcoin production

At the end of a very successful 2021, many public bitcoin miners had presented roadmaps on how they would improve their BTC production. Each of these companies had made big promises about where they wanted to get their hashrate. Naturally, given that the market was doing well at the time, there was no reason for investors to doubt these plans. But the first half of 2022 painted a brutal picture.

Marathon Digital is undoubtedly one of the leaders in public bitcoin mining, and it has struggled the most to deliver on its promises of higher BTC production. Marathon had started the year with a rare good production of 462 BTC. However, since then, its production has continued to drop. By the end of May, the mining company had produced just 268 BTC, a 42% drop from January’s volume.

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The case of other large public miners was similar. While not all recorded a consistent fall like Marathon, they were unable to sustain consistent growth in BTC production. Even Core Scientific has found itself in this rut.

public miners' production remain unsteady | Source: Arcane Research

Bitfarms was the only exception and it continued to maintain consistent growth throughout the first half of 2022. To put that into perspective, Bitfarms had seen 301 BTC produced in January. By the end of May, the BTC produced had increased by 43% to 431 BTC.

Many of these companies are facing increased mining difficulties over the past five months. Additionally, they continue to face cash flow and profitability issues given the falling bitcoin prices. These losses are also heavily represented in their stock price. For Marathon Digital, its stock price is down from its year-to-date high of $83.45 to trade at a current price of $6.87 at the time of this writing. This shows an 81% decline in the past year alone.

TradingView.com Bitcoin Price Chart

BTC losses momentum and falls to $21,000 | Source: BTCUSD on TradingView.com

Nevertheless, Bitcoin block production is on the rise again. It now stands at 6.23 blocks produced per hour compared to 5.86 blocks produced per hour the previous week, representing an increase of 6.19%. However, miner earnings remain modest with a 0.76% decline in the past week.

Related Reading | Bitcoin Holders Should Remain Cautious as Equity Correlation Continues

With prices falling, bitcoin miners run the risk of losing more of their cash. It is expected that if the current bear market continues, a good number of miners will pull back due to the inability to finance their mining activities.

Featured image from Coingape, charts from Arcane Reseach and TradingView.com

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