There has been a lot of bad news lately and the fear that comes with it is real. DeFi looks dead, altcoins ended their life by going back to $ 0 (I guess that’s a joke) and the price of Bitcoin (BTC) dropped lower than even the smartest brains in the room expected.
The unifying theme of the latest bull market seems to have been greed. Everyone became too self-confident and over-greedy, and this can be seen in the amount of debt and debt that is being unraveled when 3AC, Celsius, BlockFi and Voyager struggle with the real risk of getting upset.
It also seems that Bitcoin miners and BTC mining companies were not immune to overconfidence and the belief that “just up” was a fact until the price of Bitcoin reached the long-awaited $ 100,000 target that most analysts adhered to.
Historically, Bitcoin miners are an uncontrollable type who do not want to pour the sauce out to the public, but the Cointelegraph managed to secure a moment with HashWorks CEO and founder Todd Esse to discuss the current state of the mining industry and his predictions of what the market might be like. aimed at next year.
Calligraphy: Bitcoin is trading below real and it is also below the cost of mining production. Prices are also below their previous historical highs and the hash rate is falling. Do experts in the chain usually point out that these scales reach the lowest lows as a generational buying opportunity, thoughts?
Todd Esse: I believe that current prices represent an investment opportunity as current prices probably do not reflect profitable mining as the industry is now structured. In our opinion, prices could continue to be under pressure as the mining industry and the associated leverage around it are reset or reset.
CT: What is the status of the BTC mining industry right now? We have heard that indebted miners are going head to head, inefficient, inefficient miners are turning off, equipment could be in the process of being seized or discontinued at the fire sale. The share price and cash flow of listed miners also looks rather bad right now. What’s going on behind the scenes and how do you see this affecting the industry over the next six months to a year?
TE: In our opinion, mining still offers an attractive return on investment for those who are specific in their approach and have long-term goals. Much of the mining capacity currently installed is with ASICs in the 85 TH / s range and with energy contracts that have not been managed as a traditional large energy consumer would do.
We’ve seen this movie before, right? Easy money + poor discipline = risk imbalance. We could easily see a long period here where the mining industry is strengthening and allowing different investment capital into the market.
Related: Friday $ 2.25B Bitcoin options expire could prove that $ 17.6K was not the bottom of BTC
CT: Exactly why is now a good or bad time to start mining? Are there specific chain measures or profitability measurements that you are looking at or is it just your gut feeling?
TE: Usually, periods of difficulty and changes in accepted ideology will provide benefits for new entrants. Our only focus is to take advantage of these opportunities that are emerging.
CT: If I have $ 1 million in cash, is it a good time to set up an operation and start mining? How about $ 300,000, $ 100,000, $ 10,000? Why might not be a good time to set up a home farm or an industrial size in the $ 40,000 to $ 10,000 seed range?
TE: If you have $ 1 million in cash, this might be a good time to apply for a BTC. Fully loaded production prices for major miners are not far from these levels. I find it difficult to maintain these levels until ASICs fall further in price. I think the time of homeschooling has largely passed due to a new movement in the energy industry.
I would like to encourage those who are looking for returns to look for mining opportunities with companies like Compass Mining or other “cloud” miners where equipment and energy contracts can yield attractive investments when these dynamics change.
We believe that due to the current and expected market disruptions, as well as the increased acceptance of immersion solutions, there will continue to be an attractive opportunity to build mining operations on a large scale.
CT: Does the price of Bitcoin, which falls below the previous historical high for the first time ever, have a significant future impact on the fundamentals of the asset and the industry?
TE: In our opinion, no. It is difficult to rely on historical comparisons when dealing with new commodities and transformational technology assets such as BTC. Miners are producing BTC, given a set of inputs (computer power, access to capital and energy) and the production price does not always reflect the cost of production.
BTC mining in size, in principle, is not very different from producing oil and gas or other commodities. Drilling technology reforms changed North America’s position in international energy markets.
When oil and gas prices plummeted in the early stages of the pandemic, no one doubted whether we would have to drive cars or heat our homes any longer. Mining supports blockchain and work proof computers will prove to offer our network the ability to switch to a renewable energy future.
We are committed to being an innovative and constructive participant in this industry as it continues to grow.
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