📰 Mining turns to natural gas: Why has Cipher suddenly changed direction with its computing power expansion?
Computing power provider Cipher just announced it would scale back its grid-powered expansion plans from 4.6 GW to 3.4 GW, while increasing its support for natural gas power generation, with a target of 5.9 GW in total computing power. Behind this decision is declining Bitcoin mining revenue: Cipher is looking to diversify its energy mix to stay afloat.
Why does this news matter?
Computing power providers are broadly facing a cost crisis. As difficulty on the BTC mainnet continues to rise, the cost of mining computing power keeps climbing, while revenue fluctuates with the price. Cipher's proactive adjustment to its energy mix means the industry is beginning to seriously consider alternatives to the traditional power grid. Natural gas, with its relatively stable costs and controllable supply, could become a new favorite. This reflects a shift in the computing power industry from simply pursuing scale to focusing on cost efficiency.
Market impact
Although Cipher's total computing power remains substantial, switching to natural gas power generation could indirectly affect BTC supply and demand. More stable natural-gas-powered computing capacity could ease pressure from miners shutting down, providing slight support for the BTC price. However, the impact is highly indirect. More importantly, it remains to be seen whether the BTC price can continue to sustain miners' profits. If BTC remains weak, mining capacity may continue to shut down, even if energy costs come down.
Trading perspective
BTC is currently facing resistance at $77,016. If miners continue to operate at a loss, capacity coming offline would be bearish for the price. Cipher's move to natural gas is a response, but its effectiveness depends on how natural gas prices move and how they align with the BTC price. Put simply: stable computing power does not mean BTC is stable.
This article is not sponsored by any project. The author does not hold any of the assets mentioned.
$BTC $ETH #BTC #ETH
⚠️ This is not investment advice. Forecasts are for reference only
Computing power provider Cipher just announced it would scale back its grid-powered expansion plans from 4.6 GW to 3.4 GW, while increasing its support for natural gas power generation, with a target of 5.9 GW in total computing power. Behind this decision is declining Bitcoin mining revenue: Cipher is looking to diversify its energy mix to stay afloat.
Why does this news matter?
Computing power providers are broadly facing a cost crisis. As difficulty on the BTC mainnet continues to rise, the cost of mining computing power keeps climbing, while revenue fluctuates with the price. Cipher's proactive adjustment to its energy mix means the industry is beginning to seriously consider alternatives to the traditional power grid. Natural gas, with its relatively stable costs and controllable supply, could become a new favorite. This reflects a shift in the computing power industry from simply pursuing scale to focusing on cost efficiency.
Market impact
Although Cipher's total computing power remains substantial, switching to natural gas power generation could indirectly affect BTC supply and demand. More stable natural-gas-powered computing capacity could ease pressure from miners shutting down, providing slight support for the BTC price. However, the impact is highly indirect. More importantly, it remains to be seen whether the BTC price can continue to sustain miners' profits. If BTC remains weak, mining capacity may continue to shut down, even if energy costs come down.
Trading perspective
BTC is currently facing resistance at $77,016. If miners continue to operate at a loss, capacity coming offline would be bearish for the price. Cipher's move to natural gas is a response, but its effectiveness depends on how natural gas prices move and how they align with the BTC price. Put simply: stable computing power does not mean BTC is stable.
This article is not sponsored by any project. The author does not hold any of the assets mentioned.
$BTC $ETH #BTC #ETH
⚠️ This is not investment advice. Forecasts are for reference only
