The world’s largest bitcoin mining company, Core Scientific (CORZ), has increased other companies’ machine storage rates to just under 10 cents per kilowatt-hour, two people familiar with the matter told CoinDesk.
The company expects electricity costs to drop in the future, which will be reflected in their hosting prices.
This is Core Scientific’s latest price hike, having previously increased by 20%-25% in recent months due to soaring energy costs. With the bitcoin price hovering around $20,000, rising costs make it even harder for miners to break even.
Storage is a service that data centers provide to cryptocurrency miners so that customers can store their mining rigs and mine digital assets for a fee without having to build your own infrastructure. Core Scientific has both the storage and mining businesses, with its own 22.5 exahash/s (EH/s) and the computing power of others in its data centers across the United States. most recent earnings report.
A Core Scientific spokesperson declined to comment on specifics, but said that “increased electricity costs are passed on to customers”… While electricity costs are rising, we expect spending to increase. Electricity charges will decrease again in the future, which will be reflected in our future rates. “
“All units outside of [Bitmain Antminer] S19 XP [are] going into negative gross profit territory,” said Ethan Vera, managing director at mining services firm Luxor Technologies. He added: “If the hashprice [value of 1 terahash/second of computing power per day] drops, we expect it to hit some resistance as high-cost miners and miners low efficiency miners off.
Analyst Chris Brendler at investment bank DA Davidson downgraded CORZ from buy to neutral in a note earlier today, saying it was a tough decision because it was the “best of many” decisions. face”. However. “Miners are in a “significantly more stressed liquidity position than expected” and its storage business is under strain due to under-reinforced strength and “contracts,” Brendler writes. uneconomical storage”.
Cheap hosting has become impossible to find in the US as electricity prices rise dramatically along with natural gas prices. Meanwhile, miners in Europe have turned off their power or are moving to the northern parts of the continent in search of cheap electricity to survive.
Read more: Investment Strategist Discusses Bitcoin ‘Entering Unstoppable Maturity’ – Says Price Will Keep Rising