Opinion: Bitcoin decline will allow miners to seek financial instruments to hedge risks and promote market maturity in the long run

According to The Block, 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. About 90% of the miner customers of the crypto lending service platform Babel Finance have received the margin call notification. Among them, 50% of the miners have closed the margin transaction. At the same time, with the withdrawal of some miners and shutting down the miners, 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. In addition, some insiders said that as high-leveraged, high-risk miners withdraw from the market and more participants seek financial strategies to hedge risks, the mining industry may be moving towards 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.