Investment

Synthetix nets $20M from Web3 quant trading firm

Derivatives liquidity protocol Synthetix seals a new partnership with DWF Labs, landing a $20 million investment from the quantitative trading firm.

Tokenized asset issuance platform Synthetix has secured a $20 million investment through a new partnership with Web3 investment and quantitative trading firm DWF Labs.

The market-making and algorithmic trading company acquired $15 million worth of Synthetix’s native token, Synthetix Network Token (SNX), paid for with USD Coin (USDC) in March 2023. DWF Labs will be tasked with increasing SNX token liquidity and market-making across centralized and decentralized exchanges.

Synthetix’s perpetual futures will be integrated into DWF Labs’ trading business as part of the deal. DWF Labs has also committed to purchase another $5 million worth of SNX once the integration of Synthetix’s services has been completed.

Synthetix allows users to tokenize a variety of real-world assets into derivatives called Synths, which provide exposure to a range of different assets. Holding SNX allows users to create Synths by locking tokens into a smart contract and minting Synths against the corresponding value.

Users can trade Synths using Synthetix’s pooled collateral model, with trades between Synths generating fees for SNX collateral providers.

The creation of on-chain synthetic assets tracks the value of real-world assets, which includes synthetic fiat currencies or commodities like gold and financial instruments like equity indexes.

DWF Labs managing partner Andrei Grachev highlighted the partnership’s provision of streamlined trading mechanisms in the decentralized finance space:

“By leveraging Synthetix’s deep liquidity and composability, platforms can now deliver better trades with lower slippage, allowing for innovative hedging strategies and unique use cases.”

Synthetix’s v2 platform surpassed $400 million in perpetual swap daily trade volume in March 2023, according to data from Dune Analytics.

The derivatives liquidity protocol saw a surge in daily fees in June 2022 after a collaboration with liquidity provider Curve Finance to create Curve pools for Synthetic Ether (sETH)/Ether (ETH), Synthetic Bitcoin (sBTC)/Bitcoin (BTC) and Synthetic U.S. dollar (sUSD)/3CRV.

The partnership allowed users to convert Synths like sETH to Ether (ETH) seamlessly and saw the SNX token value increase by over 100% during the depths of the prolonged cryptocurrency bear market.

VC blockchain and crypto funding drops off in Q4 2022: Report

2022 saw an overall decline in venture capital funding going into the blockchain and cryptocurrency space.

2022 will go down as a tough year for crypto, and the bleak market conditions were mirrored by a decline in venture capital (VC) funding flowing into the blockchain and crypto sectors.

A report from Blockdata highlights consecutive quarterly drops in funding through 2022, following booming VC funding into the wider Web3 space through 2021.

Analyzing data from CB Insights, Blockdata rounded off 2022’s final quarter of venture capital funding value, noting a 34% decline from Q3 2022. The last quarter of the year was down drastically compared with Q1 and Q2, dropping by 67% and 53%, respectively.

The subsequent drop in VC investment fell every quarter from an all-time high of $11 billion in investments and 692 deals in the first four months of 2022.

Blockdata points to several factors for the decline in crypto and blockchain-related VC funding last year. The $60 billion collapse of the Terra ecosystem in May 2022 is highlighted as a trigger event, leading to the subsequent bankruptcy of cryptocurrency lending firms Three Arrows Capital and Celsius.

The implosion of FTX in November 2022 further impacted volatility through the space, while global macro conditions in capital markets affected by rising interest rates and inflation also played a role in the decline of investments from venture capitalists.

As a result, Q4 2022 saw just $3.7 billion in funding from VCs — a 61% drop from the $9.6 billion in Q4 2021. The total funding from blockchain and crypto startups declined by 11% yearly, from $32 billion to $29 billion.

Related: Top crypto funding stories of 2022

Blockdata highlights the volume of deals in 2022 increasing by 35% compared with 2021 as a positive takeaway. The firm suggests that despite a pullback in venture capital spending, investors are still looking to bankroll blockchain-based technologies, applications and startups.

The report notes that venture capital investments are shifting toward “non-volatile innovations,” including cross-chain bridges, payments and remittances, lending, decentralized autonomous organizations, asset management and digital identity management.

Q4 still produced some sizeable VC investments. Amber Group netted the highest funding, raising $300 million in a Series C round in December 2022 to tackle drawdowns of specific products affected by the FTX debacle.

Nine “blockchain mega-rounds” occurred in Q4, where firms netted over $100 million in funding. Uniswap and Celestia were the only firms to reach unicorn status in Q4 last year, valued at $1.7 billion and $1 billion, respectively.

Coinbase Ventures was identified as one of the most active corporate VC investors through 2022, participating in 13 different funding rounds of blockchain and crypto startups.

Cointelegraph Research previously highlighted the drop in venture capital investments into blockchain and crypto firms in 2022. Web3 and infrastructure service providers received the highest share of VC funding, according to Cointelegraph’s in-house research.

FTX poked the bear and the bear is pissed — O’Leary on the crypto crackdown

Kevin O’Leary believes U.S. lawmakers are “fatigued” and “pissed” with the cryptocurrency industry after having to deal with one blowup after another.

Shark Tank investor and venture capitalist Kevin O’Leary has urged crypto exchanges to “get on board with regulation” if they want to “stay out of the way” of Gary Gensler and the United States Securities Exchange Commission.

In a Feb. 20 interview with TraderTV Live, O’Leary said that U.S. lawmakers are “fatigued” over crypto collapses and that they’re only going to get more ruthless if companies continue to not comply:

“You got to get on board with regulation, you got to stay out of the way of Gensler at the SEC and other regulators. Those hombres [men] in Washington are not happy. FTX poked the bear, the bear is awake, and it is pissed.”

“These senators are really fatigued, they’re really tired of gathering every six months when the next crypto company blows up and goes to zero,” he said, adding “because they’re totally unregulated and they keep issuing tokens that are worthless.”

Venture funding for new #crypto projects is virtually dead and aftermarket trading for existing projects is at massive discounts. Reason? The #regulator is now regulating by enforcement, penalties & massive fines. The venture community has moved on to the next “big” thing, #AI pic.twitter.com/ChpjYIY9Dl

— Kevin O’Leary aka Mr. Wonderful (@kevinolearytv) February 20, 2023

O’Leary said the SEC whacking Kraken for $30 million and ordering them to immediately cease its staking services should put the industry on alert and to comply by all means.

In light of the recent regulatory crackdowns, the Shark Tank investor predicted that regulated trading platforms will be better investments than their unregulated counterparts over the next few years:

”I think the value of regulated exchanges is going to go up over the next few years, while the unregulated ones get put out of business or go to zero by the regulators.”

O’Leary recently confessed to losing basically 100% of the $15 million that FTX paid him to be its official spokesperson.

Despite admitting that FTX was a “bad” investment, Mr. Wonderful has continued to defend former FTX CEO Sam Bankman-Fried, claiming that the controversial figure should be treated as innocent until proven guilty and adding that he wouldn’t rule out investing in the failed entrepreneur again:

I am not scared of investing in entrepreneurs that have had catastrophic failures. Failure is often the best teacher.

— Kevin O’Leary aka Mr. Wonderful (@kevinolearytv) February 7, 2023

The Shark Tank investor has previously expressed dislike towards some of the more decentralized, unregulated players in the industry too.

On Aug. 13, O’Leary said Dutch authorities were right to arrest Alexey Pertsev — the creator of Ethereum-based crypto mixer Tornado Cash — because such applications and the “crypto cowboys” that run them “mess with the primal forces of regulation.”

Arthur Hayes bets on Bitcoin, altcoin surge in H1 2023 as he buys BTC

The ex-BitMEX CEO announces a BTC deployment “over the coming days” amid hopes that the good times will last for crypto until the middle of the year.

Bitcoin (BTC), Ether (ETH) and even nascent altcoins are a solid “buy,” a previously risk-off investor says.

In a blog post released on Feb. 8, industry stalwart Arthur Hayes announced a u-turn on his current crypto investment plans.

Hayes changes tune on “risky assets”

Current macroeconomic conditions stemming from the United States Federal Reserve previously made Arthur Hayes keen to avoid what he calls “risky assets.”

As inflation slows in tandem with the Fed’s rate hikes, multiple new storms are brewing in the U.S., and the Fed, Congress and the Treasury will steer the economy as they see fit, he says.

The problem is guessing how these events will play out over the course of the year. For Hayes, 2023 could well be split into two halves, with H1 being an ideal investment environment for crypto.

This runs contrary to a previous thesis from mid-January, in which the former BitMEX CEO said that he was staying on the sidelines for fear of a Fed-induced capitulation event hitting risk assets.

“My concerns about this potential outcome, which I handicapped would most likely happen later in 2023, has led me to keep my spare capital in money market funds and short-dated U.S. Treasury bills,” he explained.

“As such, the portion of my liquid capital that I intend to eventually use to purchase crypto is missing out on the current monster rally we’re seeing off of the local lows. Bitcoin has rallied close to 50% from the $16,000 lows we saw around the FTX fallout.”

Hayes continued that Bitcoin is likely far from done with its rebound despite 40% gains in January alone, comparing the risk asset environment to 2009 and the start of quantitative easing.

*S&P 500 (SPX) annotated chart (screenshot). Source: Arthur Hayes/ Medium*

This year, the picture is complex — quantitative easing has given way to quantitative tightening, where liquidity is removed from the U.S. financial system at risk assets’ expense.

However, H1 looks to be providing some relief, with some liquidity returning to avoid hitting the debt ceiling too soon. This could continue until Congress votes to raise the debt ceiling in the summer, which Hayes and others argue is inevitable.

Cash in the Treasury General Account (TGA) will be emptied to the amount of $500 billion, canceling the $100 billion monthly liquidity that the Fed is removing.

“The TGA will be exhausted sometime in the middle of the year. Immediately following its exhaustion, there will be a political circus in the U.S. around raising the debt limit,” the blog post forecasts.

“Given that the Western-led fiat financial system would collapse overnight if the US government decided to forgo raising the debt ceiling and instead defaulted on the assets that underpin said system, it’s safe to assume the debt ceiling will be raised.”

*U.S. federal debt trends chart (screenshot). Source: U.S. Treasury*

Looking out for macro “unwinding”

It is then that the tide will turn, and risk assets could become a thorn in the side of every investor once again.

It is all a matter of timing, Hayes believes. His plan is to move into U.S. dollar cash, from where a segue into select risk assets is possible. Top of the menu, it would appear, is Bitcoin.

“I’ll deploy over the coming days. I wish my size actually mattered, but it doesn’t — so please don’t think that when this happens, it will have any discernible effect on the price of the orange coin,” he told readers.

Going forward, however, altcoins represent a major opportunity, the blog post explains in its conclusion, with these likewise conditioned by timing.

“The key to shitcoining is understanding they go up and down in waves. First, the crypto reserve assets rally — that is, Bitcoin and Ether. The rally in these stalwarts eventually stalls, and then prices fall slightly,” Hayes wrote about crypto market cycles.

“At the same time, the shitcoin complex stages an aggressive rally. Then shitcoins rediscover gravity, and interest shifts back to Bitcoin and Ether. And this stair-stepping process continues until the secular bull market ends.”

Year-to-date, the total crypto market cap has gained around 34%, data from Cointelegraph Markets Pro and TradingView shows.

*Total crypto market cap 1-day candle chart. Source: TradingView*

Guiding the process in 2023, then, is the “unwinding” of the brief window of more accommodative economic conditions currently revealing itself in the U.S.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin takes ‘lion’s share’ as institutional inflows hit 7-month high

$117 million heads into crypto investment products in a single week, with the vast majority going straight into Bitcoin.

Bitcoin (BTC) rebounding 40% in January sparked the largest inflows of institutional cash since June 2022, data shows.

In its “Digital Asset Fund Flows Weekly” report on Jan. 30, digital asset investment and trading group CoinShares confirmed $117 million heading into crypto in the last week of the month.

Institutions “not sold” on post-Merge Ethereum

Bitcoin is still on the radar as an institutional investment opportunity.

As demonstrated by CoinShares’ latest data, it took just weeks of BTC price action recouping prior losses to spark a significant turnaround in investment habits — and not just in the United States.

“Last week’s US bears seem to have changed their mind with US$117m inflows, including US$26m from the United States,” CoinShares wrote in a Twitter thread accompanying the report.

“This is 3x the amount from last week. Total AuM had risen to US$28bn, up 43% from their November 2022 lows.”

Germany was the surprise leader, responsible for 40% of the week’s tally, followed by Canada.

Despite altcoins rallying in line with Bitcoin, however, institutions appear mainly interested in BTC when it comes to cash.

In the words of CoinShares, “the focus was almost entirely on Bitcoin,” a fact not lost on market participants eyeing a potential shift in preferences away from the Ethereum-centric decentralized finance arena.

“This is evidence that institutional money isn’t sold on the Ethereum thesis,” popular Twitter account Pillage Capital argued.

The numbers likewise belied testing times for certain altcoins, with CoinShares singling out Bitcoin Cash (BCH), Stellar (XLM) and Uniswap (UNI). Solana (SOL), Cardano (ADA) and Polygon (MATIC) nonetheless saw net inflows.

“Multi-asset investment products saw outflows for the 9th consecutive week totaling US$6.4m, suggesting investors are preferring select investments,” it commented.

*Weekly Crypto Asset Flows chart. Source: CoinShares/ Twitter*

GBTC sinks towards new record discount

Meanwhile, after staging a marked comeback of its own, the largest Bitcoin institutional investment vehicle seems to be running out of steam once more.

The Grayscale Bitcoin Trust (GBTC) traded at a 43% discount to the Bitcoin spot price on Feb. 7, having recovered to 36.2% in mid-January.

As Cointelegraph continues to report, Grayscale currently finds itself caught up in difficulties impacting parent company Digital Currency Group following the disintegration of FTX in November 2022.

However, GBTC was already struggling, with Grayscale attempting to force U.S. regulators to allow it to convert to the country’s first Bitcoin spot price exchange-traded fund.

*GBTC premium vs. asset holdings vs. BTC/USD chart. Source: Coinglass*

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Abu Dhabi-based Venom Foundation launches $1B fund for Web3 and blockchain

Venom Ventures Fund is allocating $1 billion to invest in Web3, blockchain and cryptocurrency projects and services.

Abu Dhabi-based blockchain platform Venom Foundation and investment manager Iceberg Capital announced they will allocate $1 billion of funding to Web3 and blockchain firms through a new partnership.

The Venom Ventures Fund is set to invest in protocols and Web3 decentralized applications (DApps) focused on payments, asset management, decentralized finance (DeFi) and GameFi products and services.

The fund is a partnership between layer-1 blockchain solution, Venom Foundation and Abu Dhabi Global Market (ADGM) investment management firm, Iceberg Capital. The latter will look to leverage its existing network to offer incubation programs and industry connections as well as marketing, exchange listing and technical, legal and regulatory support.

Iceberg Capital will manage the fund, investing in projects and companies through pre-seed and Series A funding rounds. The partnership aims to accelerate businesses developing blockchain, DeFi and Web3 products and services.

In response to questions from Cointelegraph, Venom Ventures chairman Peter Knez said that the Venom Foundation, its founders and regional institutional and private investors had seeded capital for the fund. The fund will support companies and projects with a global footprint and is not limited to Abu Dhabi-based firms.

The investment fund will look to attract startups and technology firms to use Venom’s scalable, proof-of-stake-based blockchain solution. Knez highlighted key services that could operate on top of its ADGM-regulated blockchain:

“Payment systems, central bank digital currencies (CBDC), stablecoins and remittance are core services that Venom can provide a solution for due to our unique blend of technology and enterprise.”

Knez also believes that the platform could power a multitude of use cases, highlighting the potential for micropayment solutions driving Web3 business models and financial inclusion:

“Venom has a vision where developing countries can participate in western countries’ labor markets.”

Abu Dhabi continues to make moves to become a cryptocurrency and blockchain hub in the Middle East. The capital of the United Arab Emirates published regulatory guidelines for the industry in September 2022 under the purview of the ADGM.

Over 1,500 Web3 businesses and organizations reportedly operate in the UAE, while Abu Dhabi continued to grant licenses to cryptocurrency exchanges throughout 2022, including Binance and Kraken.

Staking tech firm Kiln closes $17.8 million, eyes future ETH staking demand

Staking infrastructure firm Kiln has closed a $17.8 million fundraising round led by the likes of Consensys, GSR and Kraken Ventures.

Staking technology provider Kiln has closed out a $17.8 million fundraising round featuring the likes of Consensys and Kraken Ventures. The company is eyeing ‘exponential’ growth in demand for ETH staking services from institutional clients in the future.

Kiln is a software-as-a-service provider focused on enterprise-grade staking solutions across 16 different proof-of-stake blockchain protocols. Its infrastructure enables users to stake on-chain while maintaining asset custody on separate solutions as well as cloud platforms and validator clients.

An announcement shared with Cointelegraph outlined growing institutionalization of cryptocurrency staking as a trend in the market. According to Kiln, this is driving the need for ‘validator-agnostic APIs and services’ to allow for multi-provider staking.

Cointelegraph spoke to Kiln co-founder and CEO Laszlo Szabo to unpack the need for multi-faceted staking services. Major exchanges and service providers like Coinbase, Ledger and Binance are serving an increasingly institutionalized staking market according to Szabo and need to interact with multiple staking providers to spread operational risk:

“The legacy solution is to manage relationships with staking providers independently, leaving the product and engineering teams of the leading companies with the task of integrating different staking providers into their workflows.”

Integrating new protocols for staking now requires custom staking and unstaking transactions for each individual protocol format, as well as running data rewards collection infrastructure and integrating custom custodian APIs.

This is a primary reason for Kiln creating a suite of products enabling wallets, custodians, and exchanges to handle multi-provider staking.

Ethereum’s recent transition to proof-of-stake (PoS) consensus also leads Sazbo to believe that demand for ETH staking will ‘grow exponentially’. His firm cited data from other PoS protocols which see between 50-80 percent of assets staked, in comparison to the 12.5% of ETH’s total supply currently staked in the Beacon chain contract.

Kiln already serves institutional clients including Ledger, Binance US and GSR. It intends to go to market with these firms with a focus on institutional segments including funds and banks.

Szabo also told Cointelegraph that the firm is in discussions with leading traditional financial institutions which are preparing comprehensive crypto-related products and exploring staking:

“They are past the discovery stage already and making significant progress even though processes are long with this kind of player.”

Ethereum’s recent transition to proof-of-stake (PoS) consensus has also driven the company’s belief that demand for ETH staking will ‘grow exponentially’. The firm cited data from other PoS protocols which see between 50-80 percent of assets staked, in comparison to the 12.5% of ETH’s total supply currently staked in the Beacon chain contract.

Staking Ethereum is now an integral part of how the PoS smart contract blockchain operates on a daily basis. There are a number of staking options available to prospective users, but a full 32 ETH is required to become a validator of the network and provide participation rewards.

Everyday users looking to stake a smaller amount of ETH are able to participate in pooled staking or solutions offered by centralized exchanges.

Bitcoin price bottom takes shape as ‘old coins’ hit a record 78% of supply

Bitcoin’s long-term holders’ NUPL metric has dropped to levels that coincided with market bottoms thrice since November 2011.

Bitcoin (BTC) and the rest of the crypto market have been in a bear market for almost a year. The top cryptocurrency has seen its market valuation plummet by more than $900 billion in the said period, with macro fundamentals suggesting more pain ahead.

Another bear cycle produces more BTC hodlers

But the duration of Bitcoin’s bear market has coincided with a substantial rise in the percentage of BTC’s total supply held by investors for at least six months to one year.

Notably, the percentage of coins held for at least a year has risen from nearly 54% on Oct. 28, 2021, to a record high of 66% on Oct. 28, 2022, data shows.

This evidence suggests that long-term investors are increasingly looking at Bitcoin as a store of value, asserts Charles Edwards, founder of digital asset fund Capriole Investments.

“Despite the worst year in stocks and bonds in centuries, Bitcoiners have never held on to more Bitcoin,” the analyst noted while highlighting how the floor and ceiling in Bitcoin held for the long term have been increasing after each cycle.

*Bitcoin hodl waves featuring long-term BTC holding highs and floors. Source: Glassnode/Capriole Investments*

Hodler data hints at Bitcoin’s price bottom

Additionally, Glassnode’s research shows that the Bitcoin tokens held for at least five to six months are less likely to be sold. The number of these so-called “old coins” typically rises during bear markets, highlighting accumulation by the patient, long-term investors as short-term investors sell.

The behavioral difference is visible in the chart below, where the downtrend in Bitcoin’s price coincides with a persistent decline in the number of “younger coins” and an increase in the number of coins inactive for at least six months, or “old coins.”

*Bitcoin’s percent young (red) vs. old (blue) supply. Source: Glassnode*

As of Oct. 31, the old coins comprise nearly 78% of the Bitcoin supply in circulation versus younger coins’ 22%, thus reducing the likelihood of intense sell-offs while forming a potential market bottom.

Moreover, on-chain data tracking Bitcoin’s price and its long-term holders’ (LTH) net unrealized profits and losses (NUPL) hints at a similar scenario.

*Bitcoin entry-adjusted LTH-NUPL. Source: Glassnode*

Notably, Bitcoin’s entry-adjusted LTH-NUPL has entered the capitulation zone (red) that has coincided with the end of previous bear markets, as shown above. That includes the strong bullish reversals witnessed in November 2011, January 2015 and December 2018.

As Cointelegraph reported, MicroStrategy, the world’s largest corporate holder of Bitcoin, has also reiterated its commitment to continue buying BTC for the long term.

“We have a long-term time horizon, and the core business is not impacted by the near-term Bitcoin price fluctuations,” explained MicroStrategy CEO Phong Le.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Public Bitcoin miners’ hash rate is booming — But is it actually bearish for BTC price?

Efforts to keep Bitcoin mining operations afloat may end up pushing the spot BTC price even lower.

The share of the Bitcoin (BTC) network controlled by publicly held mining companies could grow to 40% by mid-2023, according to a new report by Hashrate Index. But this could bring more stress to an already bearish BTC market.

Public Bitcoin miners’ hash rate jumps 295% in a year

The outlook appeared after assessing the hash rate performance of Core Scientific, Marathon Digital Holdings, Riot Blockchain and other public miners over the last 12 months. Notably, these firms increased their hashing capacity from 15 exahashes per second a year ago to 58 EH/s in October 2022 — a 295% increase.

*Bitcoin mining public vs. private hash rate performance. Source: Hashrate Index*

In comparison, the hash rate of private miners increased from 134 EH/s to 177 EH/s in the same period — a 58% growth.

“The driving force for the public miners’ rapid capacity increases is that they could access cheap capital during the bull market of 2021,” explained Jaran Mellerud, a Bitcoin mining analyst and the author of the Hashrate Index report.

He added that public miners used the money to purchase massive mining rigs. As a result, these firms have tens of thousands of Bitcoin mining rigs in storage, waiting to be plugged in, while awaiting deliveries of more rigs.

Core Scientific – the biggest public #bitcoin miner – has a 5% share of the total hashrate. Marathon and Riot follow behind, each controlling over 2% of Bitcoin’s hashrate.

In total, there are seven public bitcoin miners with a hashrate share of more than 1%. pic.twitter.com/ZnwsFjvQcy

— Jaran Mellerud (@JMellerud) October 24, 2022

Thus, the Bitcoin hash rate generated by public miners could continue to increase substantially as more and more new machines come online.

On the other hand, private miners couldn’t access the capital to purchase mining rigs. So, the growth of their hash rate contributions may remain slower in comparison, argued Mellerud.

Stressed miners could boost Bitcoin sell-off risks

In 2022, Bitcoin miners, in general, have been battered by declining BTC prices, rising energy costs, regulation and growing competition. Public mining firms have rushed to raise capital by issuing additional shares or by taking on more debt, resulting in massive declines in their stock prices.

For instance, the Valkyrie Bitcoin Miners ETF, which tracks several major public miners, has plunged 75% since its launch in February.

*Valkyrie Bitcoin Miners ETF weekly price chart. Source: TradingView*

Another unpopular alternative to raising capital is selling Bitcoin at lower prices. For instance, Core Scientific has dumped 85% of its Bitcoin holdings since the end of March, according to its August update.

The same period witnessed BTC’s price decline by 60% to around $19,500 per coin. In other words, a growing hash rate may boost miners’ need to sell Bitcoin for cash to keep their operations running.

“Its an absolute bloodbath,” wrote Marty Bent, founder of Bitcoin media company TFTC, adding:

“Bitcoin miners are in a world of hurt right now and the likely outcome is a wave of failures in the coming months as hashrate continues to pump, the price remains flat and as energy prices continue to rise.”

*BTC/USD weekly price chart. Source: TradingView*

Meanwhile, Mellerud said that many public miners will not be able to handle a decline in cash flows, resulting in bankruptcies. As a result, their mining rigs could be auctioned off to private miners.

Conversely, public miners’ decisions to increase their capacity may pay off if Bitcoin’s price undergoes a decisive bullish reversal. As Cointelegraph reported , signs of a potential market bottom are already emerging, which would provide relief to miners struggling at current prices.