Bitcoin plunged 22% in 15 minutes. Is a mining disaster coming?

The 15 minutes after 18:30 on the 12th, Beijing time, should be a nightmare for cryptocurrency investors. It is not an exaggeration to describe it as 15 minutes of hell.

Almost all cryptocurrencies staged a death battle royale. The halving market did not come, but the cryptocurrency prices were the first to experience halving.

Bitcoin plummeted from $7,211 to a low of $5,555, a drop of $1,656, or 22%. According to Coin data, the total liquidation of the entire network in 24 hours was $2 billion, and the number of liquidations exceeded 80,000. The long positions that opened futures orders before the crash were almost wiped out. It was extremely tragic.

However, even so, many people are trying to buy at the bottom due to their fear and excitement. "They are all bargains," they said. Unfortunately, it is not easy to cover the position. Huobi USDT OTC price has reached 8 US dollars, and there are very few sellers. There are also adventurers who continue to open long orders, and the price of Bitcoin keeps jumping up and down in a short period of time.

For those who hoard coins, the plunge may not be so difficult to accept. CoinInitiator Pan Zhibiao said on Weibo: Short-term negative, long-term positive. Don't panic, don't add leverage.

Recalling the 1997 period in 2017, Bitcoin also plummeted. At that time, people were panicked and everyone said it was over. However, afterwards, Bitcoin and a number of altcoins started an unprecedented bull market. Those who had their futures positions liquidated were in great pain, but as the saying goes, the currency is still there, and people are still there. This may be the only comfort for many people at this moment.

Jiang Zhuoer, founder of Bitstamp Mining Pool, also said: "There is nothing to panic about. The last bull market also started with three 45% drops. According to Bitstamp, this wave has dropped from 10,500 to 5,720, which is a 45.5% drop, which corresponds to the previous round of 3,350 to 1,851 (44.7%). The reason for the drop is: the bear market panic is still there. Now you understand why I said that if you want to take the evil path of leverage, you can only use the over-the-counter leverage (which will not explode), and you can't use the on-site leverage that will explode as soon as you touch it.

The off-market leverage that Jiang Zhuoer mentioned is mining.

However, if the cryptocurrency continues to fall, the most uncomfortable people are not the holders of the currency, but the miners. This plunge is undoubtedly a nightmare for mining practitioners.

According to the mining machine profit rankings provided by the official website of Biyin, at 0.38 yuan per kWh, many mining machines have reached the shutdown price. For example, the Antminer S9, which accounts for 40% of the total network computing power, has entered the shutdown price across the board, and a total of 38 mining machine models are at the shutdown price.

What's more frightening is that the only machines that account for less than 50% of electricity costs are Ant's latest mining machines S19 and S19PRO. What does this mean? Bitcoin is expected to halve in 59 days, that is, if the price of the currency remains the same and the revenue is halved, it will inevitably be a nightmare, and most mining machines may face a life-or-death situation. Of course, mining is a dynamic balance process. If some mining machines withdraw and competition decreases, the top high-computing power and low-power mining machines can still survive. And those obsolete mining machines with low computing power and high power consumption are bound to become scrap metal, or be left there until the price rises.

Chen Lei, founder of Bitcoin Blue Whale, told Babbitt: "Today's market is the result of multiple factors. Yesterday, USDT issued 50 million more, and today the global financial market continued to fall sharply. Against this backdrop, coupled with the halving cycle, it is possible that someone took advantage of the opportunity to make more Bitcoin spot. Whether the mining industry will be affected depends on the future trend of the currency price, whether it will go sideways or rebound to the range above 8,000. At present, miners will mortgage Bitcoin to borrow money to pay electricity bills, and now the industry's cash flow has been robbed. Moreover, a considerable proportion of miners will make contract orders, and there will definitely be losses. These will increase the pressure before and after the halving cycle. The mining machine sales market has always been in a wait-and-see mood, and it may be more difficult to make up your mind now. From another perspective, when the industry's cash flow is tight and factor transactions are sluggish, it may also be a time of opportunity in crisis."

Interestingly, during today’s plunge, BTC.com data showed that BTC had not produced a block for 48 minutes, and the last block was a block with a height of 621342 mined by the CoinIn mining pool. Xiong Yue, director of the Bixin Research Institute, said on Weibo: “No blocks have been produced for 48 minutes. Guess how many bosses just called the mining farm to shut down? Or is this just a coincidence?”

The CoinIn mining pool said that this situation also occurred at the block height of 597273. The reason for the delay in packaging this time may be that a large number of old mining machines were shut down and removed from the shelves, resulting in a short-term drop in the computing power of the entire network. Data shows that the average computing power of Bitcoin in the past day was 107.25EH/s, a 6.8% drop compared to the average computing power in the past 7 days. Based on the computing power of Ant S9 of 13.5T, the number of S9s that have been shut down recently can reach 600,000. At present, the block output interval of the Bitcoin network has returned to normal.

Looking back at this moment on March 9, the difficulty of Bitcoin mining was adjusted to 16.55 T, an increase of 6.88% from February 25. It is predicted that the difficulty will continue to increase by 7.03% to 17.72 T next time. Unexpectedly, in just a few days, the price of Bitcoin suffered a Waterloo.