On March 4, Blockchain research group Diar reported that Bitcoin (BTC) mining profits have started rising after sinking to their lowest levels in one year and a half.
Bitcoin had a nightmare year in 2018. And February, 2019 has been miners’ worst year since August, 2017, when the top-ranking cryptocurrency broke through the $3,200 mark for the first time.
Mining profit dropped from $210 million in January to $195 million in February, 2019. This is nothing compared to the $951 million recorded in 2017 when Bitcoin price hit its all-time high of almost $20,000.
Miners sold their mining units at a loss
The 2018 cryptocurrency crash left miners in a confused state. Miners experienced huge losses in the last quarter of 2018. Coindoo earlier reported that Chinese miners have started selling their mining hardware by kilo instead of price per unit, after Bitcoin and other major coins declined in value by a huge percentage.
However, Diar says that Bitcoin mining revenues has begun to recover. It has also found out that gross margins for miners using Bitmain’s flagship Antminer S9 have improved significantly compared to the previous month.
The report reads in part:
“To make matters slightly more difficult, miners running optimal equipment and who have secured wholesale electricity prices have seen their gross margins squeezed requiring a massive deployment of hash power in order to stay afloat.”
A problematic year for mining giants
It is not only the miners and investors who are feeling the pinch following the crypto market meltdown. Bitmain, the Taiwan-based cryptocurrency mining equipment maker, is experiencing a large downturn in demand for mining devices.
There have also been reports suggesting that Bitmain has been facing a $5 million class action lawsuit, massive layoffs, and significant pressure from competitors during the last three months of 2018. The company has also shut down some facilities including in Amsterdam, Texas, and Israel.
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