Profitable bitcoin mining is essentially a result of an efficient and highly skilled team of professionals that can maintain runtime, a founder of a Bitcoin mining company has asserted. Therefore, even when the price is hovering around $20,000, a bitcoin miner with these attributes can still operate profitably.
‘Bitcoin Fundamentals Rarely Change’
The drop in value of bitcoin from just under $30,000 at the start of June to below $20,000 by mid-month is believed to be one of the factors that contributed to the collapse and insolvency of large crypto entities like 3AC and more recently Voyager. These two high profile entities, however, are by no means the only ones seriously affected.
Besides having to deal with lower prices, many market participants, including bitcoin miners, have had to contend with the elevated risk of becoming insolvent. As the situation with 3AC has shown, many market participants were, or are still, over-leveraged. Another significant drop in prices could result in more insolvencies.
However, for other market participants like BTC miner Permian Chain, a further drop in the price of the top crypto is unlikely to have much impact on the company’s long-term plans. According to the founder and CEO of the Canada-based cryptocurrency mining firm, Mohamed El-Masri, the fundamental value behind bitcoin is what motivates them. El-Masri also explained to Bitcoin.com News via email that the short-term price volatility of the crypto asset and the accompanying media headlines alone cannot cause Permian Chain to change course.
Below are the rest of the Permian Chain CEO’s responses to questions sent to him by Bitcoin.com News via email.
Bitcoin.com News (BCN): The continuing downward trend of crypto asset prices has already led to the collapse of some major players in this space. There is no doubt Bitcoin miners too are facing the heat. Can you explain to our readers how a bitcoin price of under $20,000 affects miners?
Mohamed El-Masri (MM): The over-leveraged situation that some of the major bitcoin miners are facing is widely a result of global macroeconomic factors that drove energy prices to the roof and put downward pressure on equity stocks and crypto markets. The major sell-off on crypto exchanges was widely triggered as a result of the vulnerabilities, and to a certain extent, the negligence of over-leveraged market participants that were forced to liquidate some or all of their bitcoin and other digital assets to cover…
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