In a piece last week titled “Crypto will be fine,” former CoinDesker Brady Dale noted that even though crypto took a beating throughout 2022, some indicators remained bullish. Notably, Bitcoin’s hashrate, which is how much computational power is directed toward securing the network, held steadfast.
“If the industry were dying, these miners should be winding down. They aren't,” Dale wrote. Indeed, according to Blockchain.com data, Bitcoin’s hashrate hit an all-time high in November.
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Bitcoin’s hashrate rose steadily over the past 12 months even as the network’s token, bitcoin (BTC), lost over two-thirds of its value. For many, that is a sign of faith in the long-term success of the network.
Of course, there’s more to the story than a single statistic. As Compass Mining’s Zack Voell (another ex-CoinDesker) detailed in a Monday report, the bitcoin mining industry took a series of beatings in 2022.
In his catalog of “all of the bad things that miners suffered,” Voell found that at least four executives of major mining firms resigned over the year, six lawsuits were filed against mining companies – for reasons stretching from breach of contract to zoning rule violations – and stocks for publicly traded mining companies were in the doldrums.
Additionally, two mining companies, Core Scientific (CORZ) and Compute North, filed for bankruptcy while Celsius Network and BlockFi, two bankrupt crypto lending firms with sizable mining wings, are likely going to have to restructure their operations. Another two mining companies, Marathon Digital (MARA) and Argo Blockchain (ARBK), are also at risk of filing for bankruptcy.
Read more: Inside Core Scientific’s Prearranged Bankruptcy
The situations vary by firm, but the main causes of the issue stem from bitcoin's depressed price and, often, poor treasury management. My colleague George Kaloudis simplified the picture by saying that over the last few years, many mining companies pursued accelerated growth strategies financed by debt and other investments while often choosing to hold onto their mined coins.
"Many miners acted too deterministically," projecting bitcoin would hit $100,000, Juri Bulovic, head of mining at crypto mining and staking firm Foundry, which is owned by CoinDesk’s parent company, Digital Currency Group, told CoinDesk’s Eliza Gkritsi. The situation worked well when bitcoin’s price was rising and the cost of financing expansion was cheap – two things thrown off course amid macroeconomic uncertainty and rising interest rates.
Already, outside firms have been stepping in to backstop losses and inject much-needed capital into the lagging professional mining sector. Galaxy Digital struck a $100 million deal with Argo, crypto exchange Binance has spun up a fund for distressed miners, and on Tuesday, investment giant BlackRock committed $17 million to bankrupt bitcoin miner Core Scientific.
Although the mining sector is in a precarious position – fueled in part by state-of-the-art mining equipment that was ordered and deployed during the heady days of 2021, when bitcoin hit a high of nearly $69,000 – the industry isn’t likely going to be wiped off the map. Battle-tested firms have better treasury management, and new financing options are coming online – like derivatives options from Two Prime that could allow miners to hedge their mining risks in a way that other commodities markets like oil do.
More capitulation and bankruptcies could come, and unprofitable miners may be taken offline. But considering the global sprawl of the mining industry, the sectors’ committed activist investors and supporters and the growing importance of mining within the hydrocarbon and wider energy sector, mining will remain. And the business might be better for its recent troubles.
Last week, Solana (SOL) fell to its lowest level since February 2021. Amid Solana’s movement, the two largest cryptocurrencies by market cap, bitcoin and ether, both shifted less than 1% in the past 24 hours, showing some stability. Airdropping is when a cryptocurrency sends a free supply of its token to a number of crypto wallets in a way to gain users or reward loyal community members.
Masonite has spent millions since 2019 to optimize its predominately on-shore manufacturing footprint.
The exchange demonstrated its robustness when about $6 billion of customer funds were withdrawn on Dec. 13, the report said.
Bitcoin and Ether rose in Wednesday afternoon trading in Asia, along with all other top 10 non-stablecoin cryptocurrencies. Solana led gains with an 18% surge, followed by Cardano and BNB.
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ALSO: Bitcoin spent a low-key 14th birthday, trading almost precisely in the same narrow range it's held since mid December; other cryptos traded sideways, although SOL rose 22% to continue its nearly week-long surge.
Kentucky told 11 financial institutions including BlackRock and JPMorgan Chase to stop boycotting energy companies using fossil fuels or face divestment.
U.S. inflation has slowed, echoing the late 1974 peak that presaged a rebound in the S&P 500, a benchmark for risk assets, including cryptocurrencies.
The two bankrupt businesses will end the hosting agreement which Core Scientific said was costing it $53,000 a day.
The U.S. Federal Reserve and other regulators issued a crypto warning for the banking system Tuesday, though the statement doesn’t extend any new policies about how traditional lenders deal with digital assets.
Investors awaited a flurry of U.S data in coming sessions that may test hopes that the Federal Reserve is near the end of its monetary tightening cycle
The company’s shares fell 27.2% in 2022, performing worse than the broader market.
Brian Mitchell was not holding back.
The venture capitalist, who has always bet on the rise of bitcoin, is confident despite the difficulties of the crypto space.
Grayscale Bitcoin Trust shares are trading at a 45% discount, according to YCharts. This comes as the co-founder of crypto exchange Gemini has accused Digital Currency Group CEO Barry Silbert of “bad faith stall tactics” as their respective companies lock horns over a business disagreement precipitated by FTX’s multi-billion-dollar implosion late last year. DCG is the parent company of Grayscale and CoinDesk.
The latest price moves in bitcoin (BTC) and crypto markets in context for Jan. 3, 2023. First Mover is CoinDesk’s daily newsletter that contextualizes the latest actions in the crypto markets.
Blockchain audit firm CertiK noted some $3.7 billion were lost to scams and hacks in 2022, making it the worst year for nefarious activities in the market’s history, so far.
People who drink more water appear to live longer and develop fewer chronic diseases, a study suggests.
(Reuters) -Banks should be more careful about the risks of fraud, legal uncertainty and misleading disclosures by crypto firms, U.S. regulators warned on Tuesday, just two months after the collapse of crypto exchange FTX stunned the financial world. In their first joint statement on crypto, the Federal Reserve, Federal Deposit Insurance Corp (FDIC) and the Office of the Comptroller of the Currency (OCC) said they had concerns with the safety and soundness of bank business models that are highly concentrated in crypto.
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