Is Bitcoin mining still profitable after coronavirus? This is the question that many are asking themselves right now, especially the profitable Bitcoin miners in China. By now, they have been feeling the effects of the pandemic for longer and more strongly.
Now is a perfect time to analyze how the Coronavirus crisis has affected profitable Bitcoin mining within China. In addition to this crisis, Chinese miners are waiting for the next halving of Bitcoin. However, with the crisis they are going through there is a shortage of supplies to improve mining conditions.
More details on the coronavirus crisis in China
Recently, it has been revealed that China is slowly recovering from the Coronavirus outbreak. The businesses across the country are also slowly recovering. Nonetheless, cryptocurrency mining, while initially appearing to be virus-proof has, and could, suffer much more.
Thanks to quarantines, profitable Bitcoin mining rig manufacturers, such as Beijing-based Bitmain and Shenzhen-based MicroBT, were unable to ship new equipment to mining centers. They are mostly located in the northwest of the country.
Unrelated, but also problematic, was the delay in shipping the 7-nanometer chips from Taiwan-based manufacturer TSMC. High demand from companies like Apple and Huawei caused the chipmaker to postpone its 2019 delivery to early 2020. The new chips are denser, more powerful and require less energy. They are also in high demand among miners.
What long-term Bitcoin mining problems could arise from the coronavirus in China?
As things return to normal, the miners prepare for a bigger problem. The so-called mining catastrophe. This refers to a scenario that many believe will cause a massive shutdown of many smaller mining companies in China.
What optimistic view do some Bitcoin miners have?
“Even if the price falls, the miners will not lose everything”. Said Dan Li, co-founder of XSJ Mining, a profitable bitcoin mining farm located in northwest China. He believes that sophisticated miners have recouped their infrastructure costs for the past 3 years. This is the effective lifespan of 16nm chips.
Although miners are affected by the price fluctuation in the short term, experienced players will understand that to be truly profitable their companies have to foresee long-term plans. In addition, new financial instruments, such as Bitmain and Canaan derivatives, protect sophisticated miners from total disaster.
The digital trading bank DAG Global offers miners innovative ways to hedge fluctuating interest rates. Although, the derivatives market for miners is still immature, and nobody knows if there is enough liquidity yet.