Bitcoin price not influenced by Mt. Gox for the first time

The once insolvent crypto exchange Mt. Gox can now be put back into operation after a Japanese court has ordered civil rehabilitation and thus ended the bankruptcy proceedings.

Mt. Gox insolvency proceedings suspended due to Bitcoin revolution

According to the Bitcoin revolution accounts, the sale of Bitcoin revolution and Bitcoin Cash, worth half a billion dollars, by the MT Gox receiver, significantly affected the price between December and March.

“On 22 June 2018 at 17:00 the Tokyo District Court issued a decision to initiate civil reorganisation proceedings for MTGOX. This suspended the current insolvency proceedings.”

This paves the way for what was once the largest crypto exchange to reinstate at least the remaining 165,000 Bitcoin and Bitcoin Cash in its repertoire. But the creditors and debtors themselves will determine how exactly the scenario will continue.

“In the civil restructuring procedure, the debtor in principle retains the authority to manage and sell the assets.

A creditors’ meeting will be held on 26 September 2018 to decide on the redistribution of the funds. In the civil restructuring proceedings, the claims for reimbursement of Bitcoins (“Bitcoin Claims”) will not be “converted” into monetary claims, so that it can be assumed that the sell-off of Mt Gox Coins will finally come to an end.

Creditors could expect deposits in Bitcoin profit

The strong downward pressure between December and March was influenced by a volume of 35,000 Bitcoin profit sold on the market by the insolvency administrator of Mt Gox. If the remaining 165,000 Bitcoin profit had to be sold now, this would depress the price considerably.

Under Japanese insolvency law, creditors must be paid in fiat currencies, so the receiver had to sell BTC and BCH. It is unclear why the parties did not agree on OTC trading (over-the-counter) in order not to influence the crypto currency market too strongly.

Since the court has ordered the civil rehabilitation, the creditors can now be paid in Bitcoin, which could rule out further price pressure from the insolvency administrator of Mt Gox in the future.

Bitcoin price crashes but mining continues to rise

The price of Bitcoin and Mining have a certain correlation. It is therefore theoretically expected that a price drop will lead to a decrease in mining or hash performance – but this is not the case.

Bitcoin’s Hashrate seems to show that the mining industry is looking for a stronger position at a time when profitability is not very high due to a low Bitcoin price that has dropped below $6,000. While the Bitcoin price has been falling since early 2018, the hash rate seems to be rising steadily.

Is there any correlation between mining and Ethereum code at all?

When we look at the Ethereum code in its present form, the correlation seems somewhat confusing. The current hashrate of the Ethereum code network is 35,366,943,171 GH/s. The current hashrate of the Bitcoin network is 35,366,943,171 GH/s.

If the entire network consists of S9 miners from Bitmain, special ASIC miners designed exclusively for crypto mining, this would mean a number of 252,621,022 asics, each consuming 1.4 kilowatts or a total of 3,536,694.

The costs of mining in terms of energy consumption and the resulting environmental damage were made public to a large extent. Places such as Iceland and China have become a hub for mining. The current energy consumption is estimated at the consumption of the whole of Singapore, a country with 5.6 million inhabitants.

The average global cost of mining a Bitcoin is between $5,700 and $5,800 at an average energy price of $0.08 per kilowatt hour.

What explains the growth of the Bitcoin trader?

Most of Bitcoin trader mining power comes from China, where electricity is cheaper than average and could explain why the hash rate is increasing even as the average return approaches the cost curve. However, the Chinese government wants to take action against domestic mining and has already begun to impose harsh penalties.

Regardless of profitability and even the risks of government intervention, Bitcoin Mining is still profitable today. Mining generates an annual turnover of around 6.3 billion dollars at current market prices, but costs only around 2.3 billion dollars. This means that the Bitcoin price could theoretically be reduced by half and that profits could still be made in some zones. In addition, when mining coins, one should not forget that many speculate that the price will rise again in the long run. So if you have enough liquidity, you may well miss out on such a “crypto winter”.