The price of Bitcoin has been falling for a hot minute, as everyone in the crypto verse is aware. In fact, it has fallen by an astounding +- 56% YTD (Year to Date). The price of Bitcoin is currently hovering around $17,000 USD, but miners are collapsing under the weight of crippling energy costs, and record-low hash prices are slicing sizable chunks out of their dwindling profits.
The hash price is actually as low as $70, based on data from the Hashrate Index. From an impressive $362 a year ago, that has decreased by more than 80%.
But what’s behind the dilemma?
You have your stock-standard annoyances, such as the persistent global recession and rising inflation. When combined, they make for poor BTC mining profits. Energy costs are rising rapidly in many markets around the world, driving the cost that miners pay to an all-time high.
The term “hash price” refers to the metric used to calculate the market value of each unit of hashing power, which is based on changes in the difficulty of mining Bitcoin as well as cryptocurrency prices. Many Bitcoin miners admit they are struggling to survive as a result of how bad the situation has gotten.
Some acknowledge that they can no longer afford mining, which makes it completely unprofitable for them. The network’s hash rate is anticipated to decline even further as a result of this as well as the tasks they must complete becoming more challenging. This is the main worry of many investors around the world. Canaan is down 44% YTD and Hut8 is down 73% in the bitcoin mining stocks, which are also suffering significantly. Undoubtedly, Argo Blockchain has suffered the most, with a dreadful 93% YTD decline.
Paying nearly USD$20K for 1 BTC is untenable, especially in the current unstable economic environment. The cryptocurrency crash may seem frightening, but according to Bloomberg’s commodity strategist Mike McGlone, Bitcoin’s price may still reach $100,000 by 2025. And he isn’t the only one making projections.
Behind the dilemma
Most respected figures and knowledgeable authorities in the cryptocurrency space concur that Bitcoin is likely to reach $100K in the near future. According to some experts, the amount could even reach $12.5 million by 2023 because they think that the pressure of inflation will spur a surge in interest in cryptocurrencies on a massive, global scale.
Before that could happen, the bear market would need to end, but after some predicted that cryptocurrency would “bounce around” at the beginning of 2023, the currency is predicted to increase in value exponentially for the remainder of the year and until 2025. Cryptocurrency volatility is nothing new, and Bitcoin has a history of steadily increasing over time, even in the face of setbacks.
The rumor mill is accurate when it says that a new environmentally friendly mining pool is in the works, which is one of the reasons why interest in cryptocurrencies is peaking. The first ecological mining pool in the world, PEGA Pool uses a portion of its members’ dues to plant trees and reduce the amount of CO2 generated by BTC miners’ computational power. The pool offers discounted fees to miners who use renewable energy sources.