What many of us saw coming happened and we warned of it. Currently Ethereum mining (and soon Bitcoin will follow a similar path given what has been seen) is in a debacle, in an apparent no-return downfall that is making even the big crypto mining companies swoon with their farms. And it is that in many countries of the world, energy is so expensive that the extraction of Ethereum is equivalent to economic losses, to the point that it is more profitable to buy cryptocurrency than to pay the electricity bill and replacing the GPUs. The fall of ethereal for undermine with GPUs is a reality and Bitcoin follows…
It was a matter of time and it was filled. Conspiracy or not, silver hat on head or not, it’s all about rising energy prices where countries are mobilizing for the climate agenda, not dependent on gas or oil and all in a record time : before 2030. This has consequences and we suffer them, but if there are sectors on the verge of exploding, that of cryptocurrencies ended up literally exploding.
No way out: Ethereum crash, unprofitable for GPU mining, loss of money
You have to look at the USA to find the first report on the situation that is going on and even if it is true that depending on the country energy is more or less expensive, the trend is on the rise, so this same point will be commented on everywhere , which added to the launch of the RTX 40 and RX 7000 plus the change of working mode of Ethereum, we can say that it is a cryptocurrency that is about to be overcome by circumstances.
In states like New England, Connecticut, Maine, Massachusetts, New Hampshire and Rhode Island, the average cost of electricity is as high as $0.22 per kWh.
In Spain, the average price today at the time of writing this article is €0.29that’s to say, $0.30Write this number down because we are talking about $0.08 more in our country than in the example states.
And that’s the one RTX 3090 overclocked to reach the 130mh/s costs any miner per day no less than between $1.85 and $2.13 in electricity. If we take into account that the reward we will get for mining today with the current price of Ethereum is $2.03, it is cheaper to buy the cryptocurrency directly than to to exploit.
Europe and USA no longer profitable to mine, El Salvador in free fall with Bitcoin
It is clear that miners and companies in the US and Europe are buying their own green energy installations and bearing the effect of energy prices for a few years, or they will go bankrupt sooner. GPU prices are at rock bottom and no one wants them now, let alone mining.
But there is worse and more critical, since El Salvador is in a state of alarm despite the calm of its finance minister. To give some context, El Salvador has Bitcoin as legal tender, he bought 400 coins worth $20.9 million, then when the price fell to 30,700, he added another 500 coins. The problem is that the investment made at the moment is usually worth between a 35% and 50% less only when its president has given the order.
Early reports indicate that the country has been unable to meet the payment of its debt, to which its Minister of Finance, as they say, puts calm:
“When they tell me that the tax risk for El Salvador related to Bitcoin is really high, the only thing I can do is smile. The tax risk is extremely minimal. The drop of forty million dollars does not even represent the 0.5% of our general national budget.
These statements are all very good, but Mody’s lowered the debt rating to CAA1which means of poor quality and very high credit risk. Given what has been seen, with rising gas and energy prices, price caps and discounts included that if not given they will be given, neither bitcoin nor ethereum are currently profitable for any miner or company.
The problem is that the outlook is worse, so if people lose their jobs, if energy continues to cost more, who is going to bet on crypto? Who will buy equipment? Anyone who has invested in Ethereum or Bitcoin to mine with GPU or ASIC you are right to worry without a doubt, the speculation bubble has been burst, the fall will be hard and inflating the said bubble will be much more complicated than before.