Bitcoin

How China Bitcoin FUD Lowers BTC Production Cost تكلفة


Bitcoin FUD outside of China may help lower the cost of BTC production.

News of the crackdown on mining farms in China rocked the market recently. All mining operations were stopped and had to be moved to other locations. No one is sure where the excavators will be moved yet. Speculation is that North America will be a new base of operations for facilities that have had to move their operations out of China.

Mining in China accounts for about 70 percent of all mining operations in the world. This means that as China shuts down its mining farms, the hash rate has fallen. Companies had to find ways to ship their excavators out of the country.

Related reading | Will Big Rise in Bullish Sentiment Drive Bitcoin Price Higher?

Energy consumption is a huge pain point when it comes to mining. China has cheap energy costs which is why it has been an ideal destination for miners.

But apart from the country’s low energy costs, it takes a lot of energy to run the computers used in mining. Energy costs are significant and in line with the cost of production, companies price their coins accordingly. This is in an effort to ensure that they are able to cover their operating costs while making a profit at the same time.

Bitcoin price floor

With many rigs out of service, this has drastically reduced the amount of electricity consumed in bitcoin mining.

The minimum price for Bitcoin has always been the amount of energy required to mine the coins. This is known as the historical price floor.

As with anything, the lower the cost of production, the lower the price. Bitcoin has proven to be no different.

Related reading | Bitcoin to Reclaim $50,000: Legendary Technical Analyst John Bollinger

With lower energy consumption translating into lower energy cost, the bottom line for bitcoin’s price drops and continues to fall. As such, the price aligns with the price floor and falls.

China FUD and price وال

FUD has always had a huge impact on market prices. With a major company like China shutting down mining for environmental reasons, this can lead to fear, which could lead to dumping.

The crypto market is also subject to the laws of economics like other assets. A higher supply than a demand will cause the price to fall. While lower supply and higher demand lead to higher price. Dumping basically increases the supply of coins in the market as people get rid of their possessions due to fears.

Bitcoin price chart | Source: BTCUSD on TradingView.com

So while the campaign may lower the cost of producing BTC, it doesn’t necessarily have a good impact on the asset’s price.

Pushed news of the crackdown Currency Below the $40,000 threshold. leave the Currency Struggling to climb again.

With many mining rigs out of business in China, online miners are seeing higher profit rates due to the lower hash rate. This makes them more likely to sell Currency for less. Exchange rates are always adapted to the prices of buy and sell orders. And if the prices in the orders are lower, the total price of Currency You will follow this and go down.

The price of Bitcoin is currently just under $37,000. It is down from $41,000 from this week’s high.

Featured image from Bitcoinist, chart from TradingView.com



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