Bitcoin miners short selling to salvage the market crash: Report
Chinese Bitcoin miners have been hurt by the recent market crunch, causing them to employ hedging options and short selling on the domestic and international stage, reported 8BTC on December 6.
The crypto markets have been on a steep decline since the beginning of November, amplifying this past week with the market cap falling to a low of $103 billion. A new swath of Chinese miners are short selling their coins to salvage some value in this bear market.
“If I mine 30 tokens in the next month, while its price may continue to fall by another 10% according to the current trend, I shall place a short order on the exchange to sell them at current price but deliver one month later,” said Jin Xin, a miner from China.
Jin started his mining business before the December 2017 bull-run and now targets the Graphic Processing Unit (GPU) miners. Riding on the Bitcoin high, Jin earned more profits during the first two months of operations than in the past three years.
In order to survive the market meltdown, Jin purchases second-hand GPU miners from those who exit the market to enhance his computing power to reach the “shutdown price.” He then shuts down the miners, removes the GPU chips and sells the device to game players. When the bull-market does arise, Jin intends on purchasing the GPU chips and selling them to miners.
Mao Sixing, the CEO of F2Pool, a major Bitcoin mining pool published an infographic showing that if Bitcoin fell to under $5,300 (36,779 yuan), the Antminer T9 would be unprofitable and the S7 model miner would just about breakeven if BTC would rise up the $11,500 (79,805 yuan). At press time, Bitcoin has dropped by over $3,000 since the beginning of November and is priced at under $3,500.
In November, the F2Pool CEO also confirmed that because of the previous month’s market crash around 600,000-800,000 Bitcoin miners have halted operations. On November 10, the top cryptos’ hashrate was roughly 47 million tera hashes per second (TH/s) and by November 24, the hashrate declined by 13 percent to 41 million tera hashes per second (TH/s).
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