Bitcoin decline will allow miners to seek financial instruments to hedge risks, which will promote market maturity in the long run

During the recent plunge in the price of Bitcoin, miners’ earnings have been greatly damaged, especially for highly leveraged and high-risk miners, who have to withdraw from the market. Crypto lending service desk About 90% of miner customers at Babel Finance have been notified of margin calls, and 50% of them have closed margin transactions. At the same time, with the withdrawal of some miners and shutting down of mining machines, the average computing power of the past three days has reached 80TH / s, which has dropped by nearly 40% in the past few days. In addition, the difficulty of the network, which is proportional to the total computing power of the Bitcoin network, has plummeted, which means that some miners have shut down their equipment due to sharply shrinking profits. Babel Finance said that miners who are still insisting on mining, use hardware as collateral to obtain cash to maintain operation. Babel Finance currently has two customers using miners as collateral and using Bitcoin rewards as collateral positions. In contrast, Matrixport, which inherits the mining machinery manufacturer Bitmain’s customer base, provides miners with financial services to hedge risks. The Block quoted industry insiders as saying that as high-leverage, high-risk miners withdraw from the market and more participants seek financial strategies to hedge risks, the mining industry may be heading for health. At the same time, after they leave, their machines will be put into the hands of some prepared people … For them, as the computing power decreases to a certain extent, the mining cost will be reduced accordingly. What’s more, as prices fall, miners will be forced to find financial instruments to fund operations and hedge risks, which is a sign that the market is maturing.