More and more mining companies are selling off considerable chunks of their Bitcoin holdings in order to be able to continue operations. Core Scientific, for example, recently announced that it had sold almost 80% of its total BTC holdings. Other companies are also being hit hard by the developments in the market, as shown in a new infographic from Block-Builders.net.
In the past, many of the big players in the mining industry preferred to hold on to their coins rather than sell them. Yet this no longer seems to be possible in the current situation, since funds are needed to cover business expenses. These include investments in data centre capacity, maintenance, electricity costs, scheduled debt repayments and more.
A look at miners’ profit margins per terahash also gives an idea of just how tense the situation is. It currently stands at US$0.09, 65% lower than on 1 January. Over the year, the majority of listed mining companies have also lost significantly more value than the number one cryptocurrency, Bitcoin.
Some analysts believe that several mining companies could go bankrupt if the crypto market does not reverse its trend soon. How such a scenario would affect the market is considered uncertain. Some voices do not consider the failure of individual miners as critical for the market as a whole, as only those players who have done best in the bear market would be at the top of the market in the future.
Other crypto companies and start-ups have been hit hard in recent weeks and months. Among others, Celsius Network, Voyager Digital, alongside Rubarb, the start-up of the nephews of German Chancellor Olaf Scholz, have had to file for insolvency, which they blame on the collapse of the crypto markets, among other things.
As the infographic shows, trading platforms are also under pressure. Coinbase is a particularly good example of this. Not only did they recently announce plans to cut 1,000 jobs, but they are also suspending their partner programme in the US market as of 19 July.