Chinese Miners Take A Knock

With the Bitcoin hashrate dropping so steeply over the past weeks, we have seen a lot of miners turning off their equipment. Compounded by a significantly lower BTC price than a month ago, it's no wonder miners are taking a heavy hit. As previously discussed in The Main Reason Why Most Cloud Mining Sites Are Scam, we concluded that the margins involved in Bitcoin mining are very thin and very difficult to maintain in the green.

The fact that approximately 40 mining operations in China have ceased operations, goes to show how difficult the current market has become. Remember, China is among the cheapest countries in the world when it comes to mining Bitcoin, as electricity costs are significantly lower than most countries. The Antminer S9 is no longer profitable and miners are having to upgrade equipment to new and more efficient models.

According to an industry insider, approximately 2.3 million Antminer S9's have been shut down since March. If that is not proof that the majority of cloud mining sites are scams, then I don't know what is.

Mining is a very innovative industry, with upgrades and advancements in equipment required constantly. It is definitely an industry for larger players, who have the capital and very good debt management. So it looks like Bitcoin mining will remain mostly centralized for the time being, or at least until the dynamics change and smaller players are able to enter the market again.

Price Predictions From 1K Through To 20K - What Is Going On?

One thing is extremely clear about the future Bitcoin price and that is, there is no clarity. One minute Peter Brandt is calling a 1K Bitcoin price, only to be shocked by his next prediction of zero, yip zero. Not forgetting that only recently he was calling for a 100K BTC price. Currently his prediction is 8.5K. I thought Peter was a seasoned trader with decades of experience but when I collect the data of his predictions, they are so disjointed and irrational. They appear to have been drawn out of a hat. From 100K to 1K, then to zero and back up to 8.5K again?

I think even Tone Vays would be shaking his head at this. Tone is one of the more bearish price analysts in the Bitcoin space. 

Many industry leaders, including Mike Novagratz believe Bitcoin could reach 20K this year. I must be honest, a drop to 4K is still possible and should not be ruled out. I too would like to think that post halving and Corona lockdown, we could move towards the 20K target. I think it's a strong likelihood.

Is A V-Shaped Recovery On The Cards For Traditional Markets?

Tom Lee of Fundstrat was recently quoted as saying a v-shaped market correction is highly likely. Venture capital investor Tim Draper seems to disagree with Tom's prediction and I think I would have to second that. Historically, market crashes have a significant amount of dead cat bounces, only to be followed by further downward movement.

To further confirm the idea of a significantly longer time period of a recovery, is the following... The damage of the current crisis has not even been fully realized yet. Businesses are still to open shop and asses. More people are still to be laid off. More losses connected to weeks of no turnover and operations are still to surface. I think it would be rather premature to be calling a recovery at this stage. This of course is my 2 cents worth.

Remember this is not financial advise and should never be consumed as such. See you in the next one! Stay safe!

More from Sapphire Crypto: Today In Crypto - April 3 Edition