A new week closes in the world of cryptocurrencies with a significant share of volatility in prices. In the field of the Bitcoin Mining industry, the problems seem to continue despite a less complex situation. The latter has to do with the decrease in the rate of capitulation of miners.
During the latter part of the week, especially on Saturday, the prices of BTC and the rest of the altcoins experienced a positive rally. This situation can be interpreted as something positive for miners, considering the improvement in income that this represents.
However, production costs remain well above the price of the currency on the spot market. Added to all this is the onslaught of the authorities in some countries with strong mining roots. If you want to learn more about these and other important news of the week, we invite you to continue reading this summary.
Top 5 News Stories in the Bitcoin Mining Industry
In this new edition (number 163) we present you a summary of the 5 most important events in the Bitcoin mining industry this week. Among them, the continued attack on the mining sector in countries such as Malaysia and Paraguay stands out. These are the most important news:
Paraguay has seized more than 10,000 ASICs in 2024
Paraguay’s National Electricity Administration (ANDE) is stepping up its fight against illegal Bitcoin mining. This week, it carried out an intervention in Hernandarias, where 693 mining machines were found. During the operation, a 4,000 kW transformer was confiscated and a manipulated meter was detected that allowed miners to save 65% on operating costs.
In July, the Senate passed a law imposing sentences of up to 10 years in prison for those who engage in unauthorized Cryptocurrency mining. This legislation addresses electricity theft and provides for the confiscation of equipment involved in illegal activities. By 2024, more than 10,000 mining machines have been confiscated.
The proliferation of these illegal operations affects the country’s electrical infrastructure. This causes an increase in demand that compromises the quality of service and energy security. Irregular connections cause overloads in transmission lines, resulting in power outages that impact the population.
Paraguay intensifies its operations to dismantle Bitcoin mining farms. Source: Diario HOY
Malaysian authorities destroy mining equipment
A viral video shows a bulldozer destroying 985 Bitcoin mining rigs in Malaysia as part of an operation against electricity theft. The Perak District Police Headquarters announced that these rigs, valued at RM1.98 million ($450,000), were recently destroyed. This action is part of a broader effort to combat electricity theft, which has been a persistent problem in Malaysia.
Authorities have arrested seven people involved in illegal mining and electricity theft. The operation took place in Seri Iskandar and is the result of multiple raids over the past year. According to Wang Kamarul Azran Wan Yusof, police chief of Sepang district, these actions are aimed at curbing illegal activities that affect the electricity supply.
Electricity theft in Malaysia is at alarming levels, with losses estimated at $776 million over five years.
Riot Platforms close to taking over Bitfarms
The dispute between Riot Platforms and Bitfarms in digital mining highlights a trend of aggressive acquisitions in the sector. Riot, the third largest mining company, has set its sights on Bitfarms, one of the most efficient firms, which has generated intense debate about the implications of such an acquisition.
Riot argues it has the right to acquire a publicly traded company, while critics warn of the dangers of centralization in the Bitcoin mining industry.
Since Q1 2024, Riot has been trying to acquire Bitfarms, starting with an offer of $2.30 per share, which was rejected. Despite withdrawing this proposal, Riot has stepped up its strategy by increasing its stake in Bitfarms to 19%. This gives it greater influence in decision-making, resulting in the dismissal of Bitfarms CEO Nicolas Bonta.
To counter the takeover threat, Bitfarms implemented a poison pill strategy to dilute Riot’s influence. However, a court sided with Riot, allowing the company to convene shareholders to ratify changes to the board.
Riot Requisitions Special Meeting of Bitfarms Shareholders and Nominates Three Highly Qualified, Independent Directors to Bring Urgently Needed Change to Bitfarms Board.
Read the full press release here: https://t.co/8DHy75xC3i.
— Riot Platforms, Inc. (@RiotPlatforms) June 24, 2024
Core Scientific pays off $267 million in debt
Nasdaq-listed Bitcoin miner Core Scientific has repaid $267 million in debt using proceeds from its recently closed convertible notes offering. The debt repayment includes $150 million in secured notes, $61 million from an exit facility, and $56 million in ASIC loans.
After paying down debt and covering offering expenses, Core Scientific added $172.8 million in cash to its balance sheet. The company plans to use these funds to support site acquisitions and initiatives in its high-performance computing (HPC) hosting business.
“With this transaction completed, we move forward with additional financial flexibility to invest in the continued expansion of our HPC hosting capacity while strengthening our Bitcoin mining business,” said Adam Sullivan, CEO of Core.
Miners’ capitulation nears its end
Recent analysis by CryptoQuant suggests that the capitulation of Bitcoin (BTC) miners may be coming to an end. In that sense, the beginning of a possible bull market could be contemplated. Currently, the bearish pressure on Bitcoin seems to be ending and the coin is above $64,000.
The Hash Ribbons indicator, which looks at moving averages of hashrate, signals the end of miner capitulation, according to BeInCrypto. This coincides with a new peak in hashrate of 638 EH/s. Such a bounce is significant, given that it is the first since the halving. Although this indicator does not determine the exact price floor, it hints at a price increase as miners’ selling pressure reduces.
If the end of the miners’ capitulation is true, the business could emerge from the lethargy it has been in for months. It is important to note that the capitulation caused havoc, mainly among small and medium-sized miners. The larger ones, especially those listed on the stock exchange, had more opportunity thanks to the ease of raising capital.
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