This year has been a whirlwind but we could all be thankful for bitcoin’s comeback.
Key Highlights
- Valarhash celebrating its 1st year anniversary with a bang
- Hashrates and Difficulty levels of the Bitcoin network stabilizing
- Miner Revenue has increased to levels last seen before the 3rd halving
- MRI levels have been below 1 recently
As Valarhash and its community recently have celebrated their 1st anniversary, it’s been a stark reminder of how much effort everyone has put in for us to be here today. Through the thick and thin 2020 has given us, including the March 12th drop, everyday is a reality check as to why we are here to support the digital asset network as we embrace the coming 3rd bitcoin bull run. It’s also been our duty to provide the best quality products and services to our community in a mutually beneficial relationship that can last indefinitely. Through this, we also see the importance of education as well. From here on out we will be publishing bi-weekly miner update reports as a way to accentuate our voice in the mining community. If you enjoy it, feel free to give this article some claps and share it!
HASHRATES AND DIFFICULTY STABILIZING
The past two weeks have been almost a nice reliever since the drop in bitcoin price we witnessed after Thanksgiving. BTC swooped back down below 17k liquidating a plethora of shorts on derivative exchanges with price levels finally coming back over 20k. For the near short term, analysts expect bitcoin to stay between the ranges of 19k and 23k at least for a few more days.
As charted below, due to the relatively stable price range bitcoin has been trading in the past 2 weeks, hashrates have also been in a healthy range between 120 EH/S and 150 EH/S. By focusing the data and formulating a 12-period moving average, a more stable plateau in hashrate movement shows. Subsequently, the difficulty has been stable with the next adjustment expected to only decrease less than a percent to 18.57T.
PRICE AND PROFITABILITY RELATIONSHIP
With bitcoin’s price finally reaching over 20k again, miner’s revenues have been looking quite healthy hitting levels not seen pre-halving despite the decrease in the nominal amount of bitcoins awarded. Before the 3rd halving, the bitcoin miner’s revenue was teetering on the $20 million/day level but quickly dropped to around $10 million/day right after the halving. Thankfully bitcoin woke up and transaction levels started to soar pushing mempool bytes higher. The result was that transaction fees on the Bitcoin network rose to a high of around $13 near the end of October which in part was a huge boost to miner revenues. Currently, congestion on the network has cooled down with transaction fees settling lower.
The high transaction fees for the Bitcoin network also gave way to proponents of system upgrades such as layer 2 networks as well as protocol upgrades with taproot (Valarhash’s own mining pool, 1THash, is a proud supporter of the taproot upgrade as is most of the mining pools).
MINER ACTIVITY
A very underrated metric in the industry which does not get too much media attention is the Miner’s Rolling Inventory (MRI), which was made more prevalent by the crypto analytics firm, Bytetree. Essentially what this metric shows is the amount of bitcoins spent that were newly minted over the course of different timeframes. So for instance, if a miner spent all of its newly minted bitcoins that they were awarded, the ratio would be 100% or 1. A metric higher would portray miners in a selling spree to either cover costs or lock-in unrealized profits. A reading lower than 1 would indicate a more conservative approach and propensity to HODL for the shorter term. Current levels over the past few months have shown that the MRI has been below 1 indicating that miners have to spend less to cover costs and their expectations of future price increases. And as we have just witnessed the 20k resistance being broke, those expected price increases can come sooner than later further keeping the MRI below 1.
LOOKING FORWARDS
As we approach the end of the year in what has been a tumultuous 2020, there are tons of things to be thankful despite the near dystopic environment we’ve all envision unfolding earlier this year. It’s safe to say that the unanimous thing all of crypto should be thankful for is, not surprisingly, bitcoin. It gave us a scare on March 12 but it has roared back to ATHs giving us jubilation for the seemingly near 3rd bull run. And as miners, we’ll never complain about a higher bitcoin price.
The word amongst the mining community is that many miners, within China and outside of China, are in a buying frenzy of the latest mining machines in anticipation of the 3rd bull run. With Bitmain announcing their S19j and S19jPro of the 19 series to be released by next year, the hardware market is once again offloading unprofitable ones for profitable ones as we continue to push the limit of wafer sizes.
And this hype is especially true within China. As reported by Colin Wu, the Sichuan Electric Power Trading Center has reported that over 4 billion kWh has been used this year in certain zones deemed legal for crypto mining, with an anticipation of this number tripling to over 12 billion kWh. As we saw this year to be the year where North American mining flourishes, that is, for the most part, true, but we also see China continuing to be a hub for mining indefinitely. But we welcome miners and mining innovation all over the world. The recent announcement by Square, with their launching of a Bitcoin Clean Energy Investment Initiative, makes us further standby these initiatives because we also emphasize clean energy in all of our mining.
About Valarhash
Chengdu-based Valarhash integrates mining machine sales, miner hosting, mining pool, and mine construction services. Led by CEO Fiona Lv, Valarhash aims to provide users with transparent and beneficial mining plans using advanced technology, with lower barriers of entry. Business operations cover hardware research and development, digital asset transactions and 1TMine hash power contract sharing. With a leading position in the hash power market, Valarhash integrates frontier resources with global vision, providing crypto compute service (CCS) and linking physical and digital worlds with blockchain technology.
For more information, please visit:
Website: https://www.valarhash.com
Twitter: https://twitter.com/VaIarhash
Facebook: https://www.facebook.com/Valarhash
LinkedIn: https://www.linkedin.com/company/vhash/
Medium: https://medium.com/Valarhash
Telegram: https://t.me/valarhashx1tmine_bitcoin
Media Contact
Email: BD@vhash.io
