The sharp decline in the value of cryptocurrencies this year put pressure on the shares of companies working in the field of digital currency mining, writes The Wall Street Journal.
Shares of American miners Riot Blockchain Inc. and TeraWulf Inc. Since the beginning of the year, prices have fallen by 78% and 89%, respectively, while the price of Canadian Hut 8 Mining Corp. and Bitfarms Ltd collapsed by 79% and 71%, respectively.
The price of bitcoin has fallen by about 70% from its November highs to $20,000. As a result, North American mining companies have earned less than $20 million per day in the last week, according to Glassnode. In October last year, the average daily revenue was about $72 million.
The situation is aggravated by the fact that banks are less and less willing to do business with representatives of the cryptocurrency sector, which negatively affects their ability to pay for the purchase of new equipment.
According to Arcane Research analyst Yaran Mellerud, companies have to sell almost all the mined cryptocurrency in order to purchase powerful new computers and chips. According to his estimates, in January-April 2022, publicly traded miners sold about 30% of all bitcoins they mined, and in May the figure exceeded 100% – that is, companies had to sell digital assets from their reserves.
“If they have to liquidate a significant portion of their reserves, this could put even more downward pressure on bitcoin prices,” Mellerud said.
According to Glassnode, if the price of bitcoin falls below $17,600, the miners will be unprofitable. On Saturday, the price of bitcoin at some point fell below $17,630 thousand. IDEG believes that the price at which bitcoin mining turns out to be breakeven is even higher – in the region of $28,000 thousand, and with this forecast, miners have been operating at a loss for several weeks.
The value of cryptocurrencies is falling along with other risky assets, including stocks, amid tightening monetary policy and increasing risks of a global recession, many analysts believe. As the world’s central banks are determined to keep raising rates, the fall in digital currencies could be protracted. So, the investment director of Absolute Strategy Research, Ian Hartnett, believes that bitcoin may well fall to $13,000.
A week earlier, market expert Igor Stakovichenko, responding to a request from Open4Business, said that in the current situation, the fall of the bitcoin market below 22,000 launched a new, even deeper “bearish phase” of the cycle, as it greatly shook the positions of long-term holders of the asset. The long-term holders, who had held their positions during the last drops, could not stand it and started dumping the cue ball at the lowest prices.
“This shook the entire structure, and both technical and macroeconomic indicators today indicate a possible fall in the main cryptocurrency to 16,000 or even lower,” the expert said.
However, according to Stakovichenko, it is too early to bury bitcoin, as “whales” (investors owning more than 10,000 BTC) continue to accumulate this digital currency, which may indicate the possibility of growth in the medium and long term.
In addition, the expert predicted possible stabilization and even some growth of the world’s main cryptocurrency.
CRYPTOCURRENCIES, GLASSNODE, MINERS, RIOT BLOCKCHAIN, SHARES, STAKOVICHENKO, TERAWULF, МЕЛЛЕРУД, ХАРТНЕТТ
The volume of gas supplies from Russia to Europe has now halved compared to last summer, and their further decline is not ruled out, European Commission energy member Kadri Simson said on Monday.
“Gas deliveries from Russia now make up half of the volumes that we received at the same time last year. They may continue to decline,” Simson said before the EU meeting at the level of ministers of energy, transport and telecommunications.
With regard to gas supplies, the EU is ready for any developments, she stressed.
Simson added that at the meeting on Monday, she will present to the ministers concrete steps that, in her opinion, would help the countries of the union to be better prepared for the reduction in gas supplies. One such step is coordinating a reduction in demand for gas.
On Saturday, Simson said that 12 EU states were completely or partially left without gas from Russia. She added that last week the EU reached an agreement to increase gas supplies with Israel and Egypt, deepened cooperation with Norway, and final direct negotiations with Azerbaijan.
Simson stressed, BNS reports, that joint gas purchases require unanimity and coordination between member states, and that the work of the European Commission creates the necessary conditions for this.
“The good news is that in May, a record was once again set for the flow of LNG to Europe – 12.8 billion cubic meters – this is the largest monthly volume in history,” she said.
At the end of May, it was reported that Poland, Bulgaria, Finland and the Netherlands, due to their refusal to accept the new settlement system, had lost the opportunity to receive Russian gas.
Number of unemployed in Ukraine and job opportunities, Jan 21 – May 22
The Ministry of Agrarian Policy and Food of Ukraine is working to extend the abolition of duties and quotas for the import of agricultural products to the EU countries for the entire period of its candidacy for the EU, as well as to harmonize Ukrainian legislation with the European one.
The integration prospects in the context of Ukraine obtaining the status of a candidate for EU membership were announced by First Deputy Minister Taras Vysotsky at a meeting with the European Business Association (EBA) on June 22, according to the EBA website on Friday.
According to the organization, in addition to the abolition of quotas and duties from the EU in early July, it is planned to cancel licenses for the export of Ukrainian wheat to the EU countries.
Also, in order to open alternative logistics routes, the ministry is negotiating with countries on the use of the Baltic and Polish corridors for the export of agricultural products.
“To support the dairy industry, the Ministry of Agrarian Policy is negotiating with the European Commission to provide grants of up to EUR 50 million to small farmers, and the possibility of submitting them to other international support programs is being considered,” EBA quotes Vysotsky.
The association noted that in the near future it is planned to separate queues for customs clearance of goods with perishable products at two checkpoints on the border with Poland – in Krakovets and Yahodyn.
As reported, on June 4, Regulation of the European Parliament and of the Council No. 2022/870 on temporary trade liberalization measures, exempting Ukrainian exports from all duties and quotas for a year, came into force.
The Polish railway company PKP Intercity is canceling free travel for Ukrainian citizens from July 1, the company’s press service said.
“The current rules for issuing free tickets for refugees from Ukraine will be valid until Thursday, June 30. From Friday, July 1, these trips will be carried out according to the general rules included in the PKP Intercity regulations.
It is noted that free travel for citizens of Ukraine in the 2nd class of economy class trains TLK and IC was introduced on February 26. Until the last days of June, more than 2.3 million citizens of Ukraine used the services of PKP Intercity.
Businessman Rinat Akhmetov has filed a lawsuit against the Russian Federation with the European Court of Human Rights (ECHR) over Russia’s military aggression against Ukraine.
This was reported by the press service of the SCM company.
“Evil cannot go unpunished. Russia’s crimes against Ukraine and every Ukrainian are egregious. The guilty must be punished. I – with the help of the best Ukrainian and American lawyers – filed a complaint with the European Court of Human Rights for damages. This lawsuit is one of the first international legal actions against Russia, the purpose of which is to stop the criminal activities of the Russian aggressor, the destruction of the Ukrainian economy and the plundering of Ukrainian assets,” Rinat Akhmetov said.
The businessman asks the European court to hold the aggressor country Russia accountable for the destruction of Ukrainian infrastructure, looting and theft of export goods. He is represented by the international law firm Covington & Burling LLP.
As the owner of Azovstal and many other industrial enterprises targeted by the Russian armed forces invading Ukraine, Akhmetov is doing everything possible to hold Russia accountable for the destruction it is wreaking on Ukrainian territory, SCM noted.
In addition to the lawsuit, the businessman asks the court to take urgent interim measures that will prevent further blockade of Ukrainian ports, looting, theft of grain, as well as steel produced by SCM enterprises.
“The looting of Ukrainian export commodities – including grain and steel – has already driven up the price of those commodities and increased the number of people in the world who are dying of hunger. This barbarity must be stopped and Russia must pay in full. I believe in justice and fight for it,” said Rinat Akhmetov.
He also urges other businessmen affected by Russian aggression to go to court.
