If past downturns are any guide, it is possible that the Bitcoin network’s energy consumption could drop further. According to the Cambridge Bitcoin Electricity Consumption Index, yesterday’s Bitcoin network power consumption was 11 GW, 27% less than April’s 15 GW.
The CCAF maintains the index which estimates the power consumption of Bitcoin miners. The CCAF uses a hypothetical maximum demand and minimum demand to estimate prices and then makes a guess at actual consumption.
According to CoinMarketCap, the Bitcoin Price dropped 53% to $21,250 Friday morning from $44,850 at April’s beginning to $21,250 by the end of April.
If past downturns are any guide, it is possible that the Bitcoin network’s energy consumption could drop further.
Prices fell half-way from their April 12, 2021 record high of $63,558 to $29,796 July 19. It took several weeks for the data to show that the power demand for Bitcoin was slowing down with it.
According to the CBECI, the power demand for Bitcoin network reached its peak in May at 16 GW. Then, after a few weeks of weaker prices, the estimated Bitcoin network power need fell to its lowest level for the year, at 7 GW, 56% lower than it was on May 2.
Last year’s price drop was exacerbated by a Bitcoin mining crackdown, which saw companies move or shut down their mining rigs to different countries.
Bitcoin miners prepare for a prolonged crypto winter
There is evidence that Bitcoin miners are already preparing for a long period of lower profits.
According to Arcane Research, public-traded Bitcoin miners must disclose the sale of Bitcoin in filings to the U.S Securities and Exchange Commission. sold more BTC than they mined in May, according to Arcane Research.
Bitfarms , a Toronto-based company, sold 3,000 Bitcoin last week for $62 Million. This was almost half the company’s total holdings. According to a press release, it reported that the company had $42 million in cash and $3349 BTC valued at approximately $67 million.
In a press release, Jeff Lucas, Bitfarms’ CFO stated that since January 2021 we have been financing operations and growth using various financing methods. “We believe that selling a part of our BTC holdings, daily production, as a source for liquidity, is the best and most cost-effective way to get liquidity in today’s market.