Veteran Bitcoin Miners Say Price Drop Is Good for Them

It’s been 15 days since the third bitcoin halving. Data shows that the bitcoin hashrate lost around 50 exahash per second (EH/s) from an all-time high around 140 EH/s just before the halving. In response to the dropping hashrate, bitcoin mining difficulty adjusted 6% downward on May 20, which means more miners stop mining in the past 2 weeks.

Despite the negative metrics, it is expected that the hashrate to pick up as more and more high-powered mining machines like S17, S19, M20S and M30S come online. The imminent rainy season in Sichuan will undoubtedly push the hashrate up as well.

Sichuan, the world’s bitcoin mining capital, get abundant rainfall as well as snowmelt from May to September, which fuels its hydropower. As the province with the most abundant hydropower resources in China, the hydropower installed capacity in Sichuan will increase to over 90,000 MW by 2020, accounting for a quarter share of whole Chines hydropower installed capacity.

Earlier this month, the province released the “First Batch of Demonstration Enterprises in Hydropower Consumption” to encourage entities in the region to help consume excessive hydropower. The list includes five bitcoin mining companies.

According to the electricity rates provided by an anonymous mining farm operator,

  • Electricity price during the dry season (Jan.1-Apr.24, Nov.26-Dec.31) is charged at 0.35 yuan/kWh ($0.05/kWh);
  • Electricity price during the mean-flow period (Apr.26-May 25, Oct.26-Nov.25) is charged at 0.25 yuan/kWh ($0.035/kWh);
  • Electricity price during the rainy season (May 26-Oct.25) is charged at 0.15 yuan/kWh ($0.021/kWh).

The miner went on that seasoned mining farm operators now only accept 60T+ mining rigs from some old clients, “machines like the M20S or other stable rigs with high hashrate and efficient power consumption are preferred and clients are less likely to have losses”.

As we know that bitcoin is created by miners, these bitcoin issuers are at the top of the industrial ecology. What do they think about the price trend of bitcoin?

“There are about five to eight million mining machines in the industry right now. The competition is fierce. If the price of bitcoin goes down, it will be good for us.”

“If the price plummets, machines like the M20/30/31 series will have little possibility to shut down unless bitcoin price goes to zero. What we want is all machines under 60T to be phased out, so that our advantages could become evident, to mine more coins.”

The veteran miner told us that they are bitcoin believers who will not deliberately to crush the market or do anything like that.

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