Bitcoin miners increased hash rate and production despite falling BTC prices in 2022
The value of Bitcoin (BTC) fell by 64.68% to $16,870 from round $47,766 at the start of the 12 months, Crypto information exhibits. On the similar time, share costs of Bitcoin mining corporations fell by 91% on common from their 52-week excessive costs, in line with Compass Mining.
Nevertheless, this has not deterred mining corporations from rising their Bitcoin mining capabilities all through 2022, as per a Compass Mining report. CleanSpark, as an illustration, grew its BTC mining hash charge from 1.9 EH/s firstly of 2022 to six.0 EH/s or about 62,000 miners to this point — a rise of 189%, the Compass Mining report acknowledged.
Bit Digital and Riot Blockchain bumped their hash charge by 157% and 148%, respectively. Moreover, in line with the report, Bitfarms, Digihost, and Marathon Digital Holdings every elevated their mining hash charge by 100%.
The rising mining capabilities inevitably led to elevated Bitcoin manufacturing all through 2022. For instance, Riot Blockchain has mined 4,872 BTC as of November 2022 in comparison with 3,812 BTC and 1,033 BTC produced in 2021 and 2020, respectively.
CleanSpark has produced 4,157 BTC year-to-date in comparison with 1,528 BTC mined in 2021, as per the report. On Dec. 21, Bitfarms introduced that it had mined its 5000th BTC in 2022, forsaking its file of mining 3,452 BTC in 2021.
Miners purchased BTC in a bullish spirit, then offered them amid a liquidity crunch
In early 2022, regardless of Bitcoin slipping far under its all-time excessive of $69,000 set in Nov. 2022, miners had been nonetheless bullish available on the market, the Compass Mining report acknowledged. Subsequently, many miners proceeded to make use of their money reserves to buy BTC along with mining them.
Within the first week of January 2022, Bitfarms introduced the acquisition of 1,000 BTC for $43.2 million, rising its BTC holdings by 30%. Within the second half of January, Argo Blockchain purchased 172.5 BTC.
Bitfarms offered 7,309 BTC in 2022, together with the 1,000 BTC bought in January, whereas Argo Blockchain additionally offered most of its BTC at a lot decrease costs. Each corporations additionally borrowed massive sums — Bitfarms entered right into a $32 million mining gear financing settlement with BlockFi, whereas Argo Blockchain launched phrases of intensive loans from New York Digital Funding Group — to fund development.
With the bear cycle working full steam, most miners confronted liquidity points. Core Scientific bought probably the most brutal hit, main it to declare chapter beneath Chapter 11 on Dec. 21. Greenidge can be present process restructuring to be able to keep away from chapter and Argo Blockchain was additionally delisted from LSE amid chapter fears.