- Industrial-scale Bitcoin miners in Texas have been forced to shut down their rigs temporarily to prevent overtaxing the state’s power grid.
- Many miners have found themselves grappling to repay their debts and raise further capital with Bitcoin’s price remaining depressed and shares of publicly-listed crypto miners have already fallen an estimated 75% this year alone, far more than the cryptocurrencies they mine.
With a searing heat wave on the horizon and in the middle of a Crypto Winter, industrial-scale Bitcoin miners in Texas have been forced to shut down their rigs temporarily to prevent overtaxing the state’s power grid.
Listed cryptocurrency miners Riot Blockchain, Argo Blockchain and Core Scientific, who run millions of energy-intensive computers to secure transactions on the Bitcoin blockchain, were attracted to the Lone Star State due its cheap energy and flexible regulations.
In the wake of a harsh crackdown on cryptocurrency miners in China, many industrial-scale miners moved offshore to places like Texas, leading to the state becoming one of the world’s largest contributors of hashrate, a measure of the computational power being contributed to secure the blockchain.
But plummeting prices of cryptocurrencies, in particular Bitcoin, and a heat wave that will likely see energy prices skyrocket in Texas may put further pressure on profits at already struggling cryptocurrency miners.
With Bitcoin and Ether have both fallen by over 70% from their all-time-highs, many cryptocurrency miners who borrowed money to buy equipment are now facing major cost pressures and some have been forced to offload their substantial holdings of crypto, exacerbating the downswing.
But unutilized machines continue to depreciate and the loans taken in better times will need to be paid off.
President of Texas Blockchain Association Lee Bratcher share with Bloomberg that there are “over 1,000 megawatts worth of Bitcoin mining load” that has been halted due to ERCOT’s (Electric Reliability Council of Texas) conservation appeal.
Many miners have found themselves grappling to repay their debts and raise further capital with Bitcoin’s price remaining depressed and shares of publicly-listed crypto miners have already fallen an estimated 75% this year alone, far more than the cryptocurrencies they mine.
Texas is expected to face more energy shortages with miners increasing demand to an estimated six gigawatts by mid-2023 increasing the cost of Bitcoin mining, and drawing into sharp focus whether Texas was necessarily the right place to situate crypto mines.
