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Coronavirus has its impact on the cryptocurrency market

Mar 9, 2020 Forex News

Bitcoin showed a sharp drop yesterday. Its price came close to $8,000. Today, the price of Bitcoin has continued to fall, and at the time of publication, Bitcoin is trading at $7752.

The support level of $8000 was broken after the opening of trading in Asia. Due to the fact that Bitcoin fell below $8000, some ASIC miners were close to the operating breakeven price. The breakeven price is now $7518 at a price of $0.05 kWh.

Coronavirus has its impact on the cryptocurrency market. Due to quarantine, Chinese mining equipment manufacturers cannot meet the demand for newer equipment. Deliveries of equipment are delayed due to the suspension of Bitmain, Innosilicon, Microbt & Ebang.

Despite the fact that official Beijing is gradually lifting quarantine and resuming supplies, a shortage of mining equipment will be felt for some time to come. And a return to normal can be in a few months.

At the moment, the breakeven point is dangerously close to the current price of Bitcoin. Thus, in the event of a further failure, mining companies will have no choice but to suspend their activities.

This is an important signal as the halving date approaches. Reducing the remuneration for mining Bitcoin, lowering the price of Bitcoin will put small miners in an uncomfortable position. They will be forced to abandon mining. And this means that large miners will be able to concentrate in their hands the bulk of the computing power. This is especially important given that bitcoin hash rates continue to hit record highs, and bitcoin is becoming increasingly difficult to mine.

In 2020, only five Chinese companies control half of the Bitcoin network. These are AntPool, BTC.com, BTC.top, F2Pool and ViaBTC.

Any centralization of the hash power of a bitcoin network should be troubling, since it destroys the network model.