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You are here: Home / News / Bitcoin News / Mining Sector Takes Desperate Measures to Save Face as Bitcoin Mining Continues its Climb
Mining Sector Takes Desperate Measures to Save Face as Bitcoin Mining Continues its Climb

Mining Sector Takes Desperate Measures to Save Face as Bitcoin Mining Continues its Climb

February 4, 2020 by Ketaki Dixit

Mining companies across the world have had difficulties in maintaining profits because of low demands as well as regulations.

These organizations have also been affected by sentiment changes in the overall working structure as well as a mission to go green.

New reports showed that investors were now shifting from heavy industries to clean energy sectors, creating massive losses in the aforementioned areas.

The monetary shift has resulted in mining companies losing billions in the financing, increasing the cost of capital and derailing several intended projects. Africa has been a hotbed for mining operations and several of the companies involved in the space are planning to pivot into the clean energy sector.

The switch to clean energy is supposed to be a pivotal point of discussion in the upcoming Investing in African Mining Indaba Conference in Cape Town. The conference is expected to help companies hunt for new sources of capital including privy equity, debt, offtake finance, and royalty finance.

Caroline Donally, the managing director at private equity firm Denham Capital stated:

“Even for companies that have good projects, it’s very difficult for them to raise any money in these markets. Previous investors who would provide equity appear to have withdrawn. A number of specialist funds have shut up shop, and generalists aren’t investing in commodities anymore.”

On the ground, research has shown that cryptocurrencies and cannabis stocks are responsible for luring investors away from the mining sector. Compared to earlier fundraises, the mining industry has seen a massive dip in terms of investments. The sector could only raise $0.3 billion in 2019, a far cry from $1.5 billion raised in 2009.

While mainstream mining faces massive obstacles, Bitcoin mining hit an all-time high last month. Bitcoin’s hash rate rose from approximately 93 exahashes per second on December 30 to more than 106 exahashes per second. The best overall gain was on New Year’s day when the hash power crossed the 119 exahashes per second mark.

After the bear dip in 2018, many miners had shut shop. The fortunes were reversed last year when there was a greater influx into the industry. Research showed that more than half a million new application-specific integrated circuit rigs came online in Q3 2019.

Filed Under: Bitcoin News, News Tagged With: Bitcoin (BTC), Bitcoin 2020, Mining

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