Big BTC mining company closed2 min read
BTC mining has seen a decline in profitability in recent times. This is no surprise given the drop in the value of cryptocurrency and the rise in machines mining BTC. However, this illustrates that profitability largely depends on the price at which BTC is being traded.
The current drop in the price of the biggest cryptocurrency on the market has resulted in a decline in miners’ cash flow. And as the ripple effects of the market crash become apparent, losers begin to emerge.
Now the first victims of the decline in BTC mining profitability are emerging. One of them is Compass Mining, one of the leading BTC miners on the market. The company had been operating with great success until last month’s crash.
However, with the downturn in the crypto market, Compass sold the mined BTC. Then announced the end of activities.
Last Monday, Dynamics Mining, a partner of Compass Mining, revealed details of the company’s closure. The company took to Twitter to announce that it was ending its contract with all Compass Mining services.
The reason was that Compass Mining did not pay the agreed energy consumption rates for the facility. But it appears that this was not a recent problem for Compass Mining.
That’s because Dynamics Mining claimed it received six late payments and three have yet to be made. Also, the company has not paid the monthly fee and has not made any payments since February 1, 2022.
Dynamics Mining also says it used a total of $1.2 million in energy consumption costs. However, Compass only paid $415,000 and $250,000 in initial energy deposits.
The miner’s shares took a hit due to its close ties to the BTC price. Based on this, Dynamics Mining suggests that the company was already insolvent even before the current market crash.