The Bitcoin rally that began at the start of the year has made miners a happy lot. According to investment company Stifel, most Bitcoin miners are expected to post profits in the first quarter of this year.
BTC rally comes at a time when power prices are finally reducing, essentially helping miners sustain their businesses. This also means we could see a turnaround for mining firms that have been struggling financially.
For example, Core Scientific, the Bitcoin miner that filed for bankruptcy last December, said over the weekend that the power prices and the current Bitcoin rally have greatly helped the company. The firm added that it is okay operationally, although most of the profit generated is being spent on professional fees.
With a better mining environment, analysts have claimed that a rise in mining difficulty is possible due to growing competition. Chairman of Bitcoin miner CleanSpark, Matthew Schultz, says he has already seen a number of mining machines cropping up online in the past few days.
Schultz reports that his company has yet to see a direct impact. He, however, believes there could be an increase in the prices of mining machines going forward.
Meanwhile, recent estimates show the mining difficulty could increase by 5.5% this week. This will be the third consecutive increase, following a 1.2% jump last week and a 9% increase in the previous week.
Data from ASIC trading desk operator Luxor shows that the prices of ASIC machines began going up in January when Bitcoin began rallying. A similar trend was seen in November 2021, when the crypto market was booming. The prices of these machines have increased by 10% since the start of February.
Luxor COO Ethan Vera says mid-generation ASIC machines are cheaper than the new-generation models because they tend to be more sensitive to shifts in mining economics. He adds that as BTC approaches $30,000, the ASIC prices will likely trend up.
But Luxor does not anticipate existing miners spending a lot on new mining machines as they did in 2021, where many took large loans to buy the equipment amid the bull run, only to end up laying off the machines the following year.