The share of the Bitcoin (BTC<\/a>)\u00a0network controlled by publicly held mining companies could grow<\/a> to 40% by mid-2023, according to a new\u00a0report by Hashrate Index. But this could bring more stress to an already bearish BTC market<\/a>.<\/p>\n The outlook appeared after assessing the hash rate performance of Core Scientific, Marathon Digital Holdings, Riot Blockchain and other public miners over the last 12 months. Notably, these firms increased their hashing capacity from 15 exahashes per second a year ago to 58 EH\/s in October 2022 \u2014 a 295% increase.<\/p>\n In comparison, the hash rate of private miners increased from 134 EH\/s to 177 EH\/s in the same period \u2014 a 58% growth.<\/p>\n \u201cThe driving force for the public miners\u2019 rapid capacity increases is that they could access cheap capital during the bull market of 2021,\u201d explained Jaran Mellerud, a Bitcoin mining analyst and the author of the Hashrate Index report.<\/p>\n He added that public miners used the money to purchase massive mining rigs. As a result, these firms have\u00a0tens of thousands of Bitcoin mining rigs in storage, waiting to be plugged in, while awaiting deliveries of more rigs.<\/p>\n Core Scientific – the biggest public #bitcoin<\/a> miner – has a 5% share of the total hashrate. Marathon and Riot follow behind, each controlling over 2% of Bitcoin’s hashrate.<\/p>\n In total, there are seven public bitcoin miners with a hashrate share of more than 1%. pic.twitter.com\/ZnwsFjvQcy<\/a><\/p>\n \u2014 Jaran Mellerud (@JMellerud) October 24, 2022<\/a><\/p><\/blockquote>\n Thus, the Bitcoin hash rate generated by public miners could continue to increase substantially as more and more new machines come online.\u00a0<\/p>\n On the other hand, private miners couldn\u2019t access the capital to purchase mining rigs. So, the growth of their hash rate contributions may remain slower in comparison, argued Mellerud.<\/p>\n In 2022, Bitcoin miners, in general, have been battered by declining BTC prices, rising energy costs<\/a>, regulation and growing competition. Public mining firms have rushed to raise capital by issuing additional shares or by taking on more debt, resulting in massive declines in their stock prices.<\/p>\n For instance, the Valkyrie Bitcoin Miners ETF, which tracks several major public miners, has plunged 75% since its launch in February.<\/p>\n Another unpopular alternative to raising capital is selling Bitcoin at lower prices. For instance, Core Scientific has dumped<\/a> 85% of its Bitcoin holdings since the end of March, according to its August update.<\/p>\n Related:\u00a0Kazakhstan among top 3 Bitcoin mining destinations after US and China<\/a><\/em><\/strong><\/p>\n The same period witnessed BTC\u2019s price decline by 60% to around $19,500 per coin. In other words, a growing hash rate may boost miners\u2019 need to sell Bitcoin for cash to keep their operations running.<\/p>\n \u201cIts an absolute bloodbath,\u201d\u00a0wrote<\/a> Marty Bent, founder of Bitcoin media company TFTC, adding:<\/p>\n \u201cBitcoin miners are in a world of hurt right now and the likely outcome is a wave of failures in the coming months as hashrate continues to pump, the price remains flat and as energy prices continue to rise.\u201d<\/p><\/blockquote>\n Meanwhile, Mellerud said that many public miners will not be able to handle a decline in cash flows, resulting in bankruptcies. As a result, their mining rigs could be auctioned off to private miners.<\/p>\n Conversely, public miners\u2019 decisions to increase their capacity may pay off if Bitcoin\u2019s price undergoes a decisive bullish reversal. As Cointelegraph reported<\/a>, signs of a potential market bottom are already emerging, which would provide relief to miners struggling at current prices.<\/p>\n The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.\n<\/p>\n<\/div>\nPublic Bitcoin miners\u2019 hash rate jumps 295% in a year<\/h2>\n
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Stressed miners could boost Bitcoin sell-off risks<\/h2>\n
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