Chinese Bitcoin Miners: We’ll Never Be Shorters Despite The Tough Times
Despite the poor market conditions where bitcoin price refused to climb after the bitcoin reward halving, veteran bitcoin miners in China have been buckling up for tough times and kept holding on to their newly-created bitcoins for the next bull that they believe will surely come.
Lv Lei, co-founder of bitcoin mining service provider Cybtc, gave a bold prediction that there will be a 10-fold increase in bitcoin price post-halving. A veteran miner surnamed Xu told 8btc that their goal is the $30,000-$40,000 range during the next bull, and before that they will hold on to their newly-created bitcoins.
Seasoned miners remain loyal to the network
The crypto space has been debating whether bitcoin miners will soon capitulate after the halving.
Small mining farms may be forced to capitulate and shut down for the sustained prices below the production costs; while seasoned bitcoin miners, who are well-capitalized and better prepared to ride out the market routs, remain loyal to the network.
At the miner summit which will last for a week in Sichuan, most bitcoin miners outside the conference venue were complaining about the poor market conditions and the difficulty in mining.
According to some miners, bitcoin mining farms in Sichuan are not saturated and in dire need of mining rigs. On the other side, small miners are making no money from mining.
Dai Pengcheng, regional sales director at Bitmain, do simple math for us. In 2016, bitcoin’s network hashrate was around 1400P, and today it is about 100E, an increase of about 71 times. In comparison, the price of bitcoin was somewhere around $400 in 2016, and it is now hovering around $9,000, an increase of about 22 times. In terms of mining revenue, in 2016, 0.0025 BTC could be earned per Tera hash, and now it is almost 320 times lower. In other words, bitcoin mining is getting harder and more expensive.
We’ll never be shorters
After all the complaints and whining, almost all the miners gathering at the conferences said the bull market hasn’t arrived yet, but it won’t be late. And they treasure every bitcoin at hand. At current prices, it is painful to sell their coins. To pay the electricity bill, they had to sell some coins to survive though, these miners said they are not shorters and would never be.
Unlike speculators who only care about the prices, miners need to be more patient. They have been used to the long payback time and burying themselves in mining instead of the pump-and-dump games that they are not good at.
Hu Donghai, founder of bitcoin miner reseller fengwo.com, said that in the previous halving cycle, most miners were looking for a 50% return. While after this halving, he thought, an annualized return of 20% would be pretty good.