Two insights into the effects of the Bitcoin crash on miner economics

Chris Dannen

By Chris Dannen


At long last, the market seems to be paying greater attention to miner economics, investigating how remaining hashpower might unwind if the price of bitcoin keeps dropping. Meanwhile, the legacy equities markets appear poised to follow, as predictions of a 2019 recession grow louder.

The Price Crash & The Impact On Miners
"Abstract: Cryptocurrency prices have fallen significantly in the past few weeks. In this note, we analyse the impact this price decline may have on the mining industry. The Bitcoin hashrate has fallen around 31% since the start of November 2018, equivalent to around 1.3 million Bitmain S9 machines. We conclude that many miners are struggling; however, we point out that not all miners have the same costs and that it’s the higher cost miners who switch off their machines first, as the price declines."

The hashrate deep dive (1/2)
"We have a simple problem that cannot be fixed — we don’t have enough data. We are only now going through the second proper Bitcoin bear market. From what we have seen so far, hashrate follows price at the end of a bear market. Price follows hashrate at the beginning of a bull market. We will be testing this further in the next part of the article, where we will be looking at DASH and Ethereum."

Nasdaq Parabolic Structure Broken

Other News

How Did Twitter CEO’s Square Overtake Coinbase as #1 Bitcoin Buying App?
"Square’s Bitcoin integration almost instantly appealed to its existing user and client base, as a large portion of the global population that is interested in cryptocurrencies has consistently been millennials throughout the past several years. With the app, users can purchase Bitcoin efficiently because their bank accounts and credit cards are already connected to the application."

Cryptojacking Malware KingMiner Evades Detection to Mine Monero
"A malware used to mine the Monero cryptocurrency is relying on constant improvements to avoid detection and increase the chances of success. According to researchers at Israeli cybersecurity firm Check Point Software Technologies, the malware which is known as KingMiner will likely continue getting updated in the future in order to increase the probability of successful attacks. This will inevitably make detection even harder."

JPMorgan, BofA Detect Hints of a U.S. Recession Looming in 2019
"The current expansion is eight months away from becoming the longest in postwar history. Most indicators remain solid enough to suggest it’ll get there. But the sell-off in stocks and an inversion in part of the bond yield curve has analysts parsing the tea leaves for anything that points to a contraction in 2019."

Federal Reserve Officials Search for the Elusive ‘Neutral’ Interest Rate
"Some Fed watchers say the October Powell was not as hawkish, nor the November Powell as dovish, as market participants concluded. For one thing, the current target range for the federal funds rate is 2 percent to 2.25 percent. That’s not much lower than the bottom of the range of longer-run estimates in the dot plot. If that narrow gap is what Powell was referring to in November when he said rates were 'just below the broad range of estimates,' then he was just stating a fact, not hinting at future policy. 'Powell’s description contained little news, in our view,' Goldman Sachs Group Inc. economists Daan Struyven and Jan Hatzius wrote on Nov. 30."

Decred Journal – November 2018
"November was an exciting and productive month for the Decred Project. The community began to reap the benefits of Politeia development with live proposal voting and the first proposals being approved. Stakeholders collectively voiced key steering decisions regarding the future of contractor management, public relations, and research all from the comfort of their Decred wallet of choice (Decrediton or command line with the politeiavoter tool)."

Reason only sometimes leads to rationality
"First: be wary of all the noise. And if you want to be actually right, you need to audit your incentives. Because where there are incentives, there is the incentive to construct arguments supporting that position. And second: if you’re trying to attract users–real, mainstream, salt of the earth users–the arguments you and your friends find convincing might not appeal to them. Your arguments likely confirm your current position, which these ethos-agnostic users do not hold."

Betting on Dystopia
"The right way to think about cryptocurrency coins is as lottery tickets that pay off in a dystopian future where they are used in rogue and failed states, or perhaps in countries where citizens have already lost all semblance of privacy. That means that cryptocurrencies are not entirely worthless."

Coinbase Gearing Up for Paradex Bulletin Board Expansion?
"While Coinbase's coffers would allow for the exchange to weather dwindling earnings from low trading volumes, as any business, it still needs to address revenues. The short-term gains from increased trading activity could come at the expensive price of Coinbase's own reputation should, when or if these projects fail to pick up any demand and burn unstudied retail investors."

What's the deal with Casper?