Despite data showing that the Bitcoin (BTC) price may have fallen to the point where it is unprofitable for the average student, Marathon Digital Holdings says it will continue to work on accumulating leading crypto assets.
Charlie Schumacher, Marathon Digital’s chief communications officer, told the Cointelegraph on June 15 that although the company “is not immune to the macroeconomic environment”, it is “fairly well insulated and well located” to withstand the current downturn, due to low operating costs and fixed energy prices.
“By comparison, in the first quarter of 2022, our cost of producing Bitcoin was approximately $ 6,200. We also have fixed energy prices so we are not dependent on changes in energy markets. “
Schumacher added that the company has focused on its Bitcoin production and the accumulation of cryptocurrency assets, believing that the asset will continue to rise in the long run.
“Because we report our finances in USD, the price of Bitcoin will always have a significant impact on our financial performance. To evaluate our mutual progress objectively, we try to focus more on our Bitcoin production. It is important to keep in mind that Bitcoin mining is a zero-sum game, “he added.
“Certainly Bitcoin is less valuable than the dollar at the time it is earned, but if you believe in Bitcoin’s ability to value in the long run, it’s never bad to earn more BTC.”
In a statement from June 9, Marathon said that it has been collecting or “holding” its Bitcoin and has not sold anything since October 2020. As of June 1, 2022, Marathon held approximately 9,941 BTC, which is about 200 million dollars worth at current prices.
– Marathon Digital Holdings (@MarathonDH) June 9, 2022
In fact, Schumacher pointed out that as the price of Bitcoin falls, so does the number of people who can continue to engage in profitable mining, which will force inefficient miners out and also reduce the difficulty of mining new blocks.
“When the difficulty ratio decreases, those who can continue mining have the opportunity to earn more bitcoin.”
Bitcoin’s current hash rate, also known as Bitcoin’s processing capacity, fell from a historic high (ATH) of 231,428 EH / s on June 12 to 205,163 EH / s at the time of writing.
A notable effect occurred a year ago after the Chinese took action against cryptocurrencies mines, which peaked at the hash market growth of 180,666 in May 2021 to 84.79 in July 2021.
Price meets the average cost of mining
Last week, CryptoRank’s cryptocurrency market data and analytics platform underlined that on June 16, the price of BTC was on par with the average cost of mining, noting that for some it might even be unprofitable to work at the moment.
#BTC Reduces prices to average mining costs
– CryptoRank platform (@CryptoRank_io) June 17, 2022
Markus Thielen, Chief Investment Officer of IDEG Singapore, told the Cointelegraph that it could drop out of the mining industry as most had set their budgets in the fourth quarter of 2021, due to changes in market conditions.
“In fact, we expect a fall as most miners seemed to set their budget for 2022 early in the fourth quarter of 2021 and market conditions have changed significantly.
Thielen said they estimate that some of the smaller mines that do not have economies of scale will have a compensation rate of about $ 26,000 to $ 28,000. Bitcoin is currently priced at $ 20,085 at the time of writing.
Connected: Bitcoin is heading for a sad weekly close as BTC prices drop to $ 20K
Last week, a report from S3 Partners pointed to Marathon Digital Holdings as one of the US companies with the highest short selling interests along with MicroStrategy and Coinbase.
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