Bitcoin, the most appreciated and valued cryptocurrency since 2008 in terms of market capitalization and trading volume, is expected to end the month with lows lower than last year.
Bitcoin’s Fall From Glory
On November 10th 2021, Bitcoin made a magnificent cut to its all-time high of $69,000 due to the bull run. However, according to coinmarketcap statistics, this coin has lost more than 70% from its peak, falling below the $15,000 level. At the time of publishing, this coin is trading for $16,500.
According to on-chain and overall assessments, bitcoin’s performance has plummeted and it is now selling at a loss in the market.
The FTX meltdown earlier this year exacerbated Bitcoin’s ongoing and compounded battle and fight for life. This crash depleted investors’ cash and trade activity worth more than $200 million. Not only that, but exchanges and investors suffered as a result of this unfortunate event.
Along with this catastrophe, Bitcoin miners continue to confront challenges, with high costs of mining equipment, high energy usage, and low trading activity.
An asset management business also said that it has noticed a large number of Bitcoin miners selling off their assets from the reserve owing to the volatile market conditions, at an increased rate of more than 300%.
The organization also claimed that if no decline in the dump by miners is seen, miners may soon be out of work.
Challenges Facing Bitcoin Miners
However, one of the issues that miners have faced is the complexity of the hash. The hash —SHA256— Algorithm that miners must solve in order to mine blocks has become increasingly difficult, and the more difficult it becomes, the more energy is required to solve this puzzle. And, given the current market conditions, it offers a significant challenge to miners.
More so, the energy cost necessary to mine these blocks is quite high, and it is now becoming extremely severe and difficult for miners to sustain. This high energy cost has also reduced profit for miners, since the majority of expenditures are spent on purchasing machinery to solve this challenge and very little to profits.
Also, the price of bitcoin has not helped matters, since it has reached new lows in terms of trading volume. As most investors are cautious during this period, there are more dumps than buying.
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