Mining companies in a bear market

If mining Bitcoin stays unprofitable to mine for a long period of time. how would mining companies continue to operate? I’m under the impression that many companies hold onto most of the Bitcoin they mine because they think that the value will go higher, but how long is this sustainable? If a mining company were to close wouldn’t this lead to the liquidation of all their Bitcoin? It seems like Bitcoin’s value is still vastly overinflated if all the mining companies are just holding onto their Bitcoin that were never purchased on the market. I’m curious to hear your guys’ thoughts on this.

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12 thoughts on “Mining companies in a bear market”

  1. > If mining Bitcoin stays unprofitable to mine for a long period of time.

    This will never happen, because mining is a dynamic process and self-regulated through the difficulty adjustment.

    Miners either mine in profit or shut down – and this will cause the mining to always be profitable for those who pay the lowest electricity price.

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  2. Call me an anarchist or even a mad man, but I wouldn’t mind if mining were to be a thing done at home again with a fair chance for everyone.

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  3. I am holding HNT until the value goes back up and continue to mine in the meantime.
    Not quite the same as Bitcoin but my strategy.

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  4. Most companies sell in a dca type strategy.

    I’m sure each has its own preferred algorithm as to how much they hodl.

    At least as a holder of HIVE stock, they email me updates and keep shareholders aware of their sell/hodl strategy.

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  5. In the late stages of a money printing bubble, energy prices rise fast. Just like now with natural gas and oil going up. However, crypto rises early in the money printing bubble just like in 2020. If these crypto miners still have a lot of cryptos on their balance sheet, it would be logical for them to sell enough to at least keep the miner running. Just look at MARA and RIOT. Biggest crypto mining stocks. Horrible stock price action. This implies these guys are dealing with sky high energy prices and low crypto prices.

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  6. There is a huge difference between large mining companies and us “enthusiast home miners” that most are not aware.

    The huge mining companies get a high break to almost nothing per kilowatt hour costs where as pay full market cost.

    Where I am not profitable due two rate hikes this year the companies are firmly in the green.

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  7. I was just thinking this too. So it’s all about supply, demand and equilibrium. The lower the price goes the less miners there are?

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  8. The big miners might start running at an overall loss but continuing to mine may still make sense if they can beat electricity/other opex costs. Eventually enough will be forced to significantly pull back and difficulty will drop making the rest profitable again.

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  9. The mining companies will adjust to the price/energy cost so that they can make a profit with the lowest amount of energy possible

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  10. Why would all their BTC get liquidated?

    They own hundreds of computers/miners and a building. If they cant pay the rent they get rid of the building and store or sell the miners. They can still hodl their coins – some small incidental expenses.

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  11. If Bitcoin goes down, miners drop out, meaning more of the pie for miners that continue to stay in… also most miners probably did make a lot of money in this last bull run and have pretty large war chests. Any that paid to switch to solar and paid upfront it just means to them that they break even a little longer than planned, but their costs aren’t more than they are mining…

    The best way to protect against a bear market for a miner is by switching to solar or wind, or any renewable really…

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