Bitcoin Mining: Here’s What it Needs to Survive in 2023

Paigambar Mohan Raj
Source: Techslang

The crypto market lost around $1.3 trillion in 2022. Moreover, the price of Bitcoin (BTC) fell by over 60%. As a result, the Bitcoin mining industry also took a hit in 2022. Miners are taking on some of their worst losses as sell pressure reaches new highs.

Additionally, several mining company stocks fell by more than 90% due to the falling price of Bitcoin and the lack of profitability in the mining sector. Core Scientific ($CORZ), Riot Blockchain ($RIOT), Bitfarms ($BITF), Iris Energy ($IREN), and CleanSpark ($CLSK) fell by around 99%, 85%, 91%, 92%, and 79%, respectively. Furthermore, Core Scientific has even reached the point of bankruptcy.

However, a few things need to happen for the Bitcoin mining industry to turn around. Firstly, the price of BTC needs to pick up steam. Without BTC prices increasing, sell pressure would continue to mount with rising electricity costs. For BTC prices to gain steam, more investments are needed. And for more capital to flow in, interest rates need to cool down. Once interest rates go down, funds become cheaper to deploy, which leads to more investments.

However, BTC might have to overcome more obstacles before sailing into the greens.

More hardships for Bitcoin miners in 2023?

According to specialists in bitcoin mining, there is little chance that the industry will see relief anytime soon. The worst is yet to come in terms of capitulation and bankruptcies, especially in the first half of 2023, according to Jaime Leverton, CEO of Canadian mining firm Hut 8 (HUT).

Marathon Digital CEO Fred Thiel refrained from speculating on how many additional miners would file for bankruptcy in the upcoming months. But he said that individuals who relied on equipment borrowing to finance growth would probably still have challenges.

In 2023, the overleveraged Bitcoin miners will experience the most pressure, according to Andy Long, CEO of bitcoin miner White Rock Management. Long added that some miners might benefit from purchasing more effective mining equipment in large quantities at historically low costs.

Nonetheless, the immediate future of Bitcoin miners seems uncertain. At press time, BTC was trading at $16,648.96, up by 0.7% in the last 24 hours.