The coronavirus has shut down many non-essential businesses, and that has affected the bitcoin mining arena in many ways.
It All Depends on Where Bitcoin Mining Happens
For several bitcoin mining ventures, where they’re located has a lot to do with whether they’re permitted to run normally during the pandemic. In Canada, for example, bitcoin mining and the extraction of new cryptocurrencies is considered essential. Thus, many firms have been allowed to remain open, though some report that their employees are working from home or on a remote basis.
In other areas, however, the situation is different. Countries like Argentina – which boasts a large cryptocurrency ecosystem – has decided that all bitcoin mining companies are not important enough to keep open, nor do they serve any grand purpose to general society. Thus, they have been ordered to remain closed during these hard times.
But it’s not the idea of staying open that’s having the biggest effect on crypto mining facilities. In fact, remaining open or staying closed doesn’t seem to make much of a difference considering bitcoin has already undergone several price drops over the past few weeks thanks to the spreading pandemic, which has had monster effects on both traditional and digital markets.
Bitcoin is currently trading for just over $7,000. This is the second time in a month that bitcoin has crossed this line, and while it’s good news in the long run, there’s still too much loss to contend with. The fact is that BTC was trading for well over $10,000 two months ago.
Mining rewards have fallen significantly as a result, and they’re slated to fall even further next month when the bitcoin halving occurs. F2Pool business director Thomas Heller says there’s a lot riding on this event, which could ultimately spell either success or doom for most bitcoin miners. He states:
Many miners are relying on the bitcoin price to increase post-halving in order to stay operationally profitable, and that’s not an ideal situation for any business to operate in. In early March, several miners had their bitcoin-backed loans liquidated, and other operators had to turn off their machines.
It was around that time that the world’s number one cryptocurrency by market cap fell into the $4,000 range – a near-$6,000 drop from where it had been just weeks before.
We Can’t Make Deliveries
One of the other problems that many mining ventures are facing is the fact that supplies from China have either been delayed or cut off altogether. Companies like Bitmain – arguably the largest supplier of bitcoin mining equipment in the world – has already issued statements saying that orders have been delayed indefinitely due to border closures and quarantine regulations, and they cannot guarantee the proper delivery of any said miners.
Under normal circumstances, bitcoin miners could potentially be delivered within four to eight weeks.