Bitcoin Mining Market Still Strong as Shown by Bitfurys $1 Billion Valuation

bitcoin mining

This week, Bitcoin mining equipment manufacturer and blockchain software firm Bitfury secured a valuation of $1 billion from billionaire investor Mike Novogratz and Korelya Capitals $80 million investment in the firm.

The multi-million dollar funding round comes after the release of Bitfury Clarke, the firms new Bitcoin ASIC miner, designed to compete against Bitmains new equipment, the 7nm Antminer.

Valery Vavilov, the CEO of Bitfury, stated that the demand for the blockchain and crypto in general from companies and institutions had increased significantly over the past 11 months.

We see a lot of demand from companies and public institutions to put their services or products in the blockchain — especially in emerging markets, where administrative systems can be very inefficient.

Rising Activity in Mining and Blockchain

Throughout the past four months, despite the sideways market of Bitcoin (BTC) and the 70 percent correction experienced by the cryptocurrency market since January, the hash rate of the Bitcoin blockchain network has increased substantially from 15 million TH/s to over 50 million TH/s.

The increase in the hash rate of the Bitcoin network, which represents the strength of the blockchains computing power, led to a surge in the breakeven cost of crypto mining.

In July, cryptocurrency analyst Barclay James reported that the breakeven cost of mining Bitcoin is around $6,900, based on the hash rate of the Bitcoin network at the time which was 35 million TH/s.

According to Blockchain, the most popular cryptocurrency wallet platform in the sector, the hash rate of Bitcoin currently remains above 50 million TH/s, up 42 percent since July. Since the $6,900 breakeven cost of Bitcoin mining was calculated based on 35 million TH/s, the breakeven cost of mining has well surpassed $7,500 even in regions with naturally cold climates and cheap electricity like China that reduces operational costs.

China has some of the worlds cheapest electricity rates as well as average temperatures consistent with temperate regions. This is important as cooling is one of the largest overheads in mining. In addition, the countrys generally low operating costs also give it a competitive advantage, James wrote.

Due to the rise in the breakeven cost of mining, miners are generating BTC at a fairly large loss. Until BTC breaks out of the $7,000 resistance level and to the high region of $7,800 to $8,000, miners will continue to mine BTC with a loss of around 20 to 30 percent.

Still, the hash rate of

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Tags: Mining, Bitcoin, Blockchain, Valery Vavilov, Mike Novogratz, Still, China, Throughout the, Bitcoin network, Barclay James