The advent of the COVID-19 pandemic brought on and continues to bring on some serious questions for every segment of the market, and that includes cryptocurrency. Within two days, Bitcoin was slashed in half as investors pulled their money out in droves and it seemed that almost overnight the question of whether or not Bitcoin was a safe-haven currency had been resolved. But neither was gold. The sharp truth was that panic had set in and nothing and no one was safe from this new economic reality.
Bitcoin’s volatility is hard to gauge. Minor spikes and dips happen all the time, and what cryptocurrency enthusiasts consider to be minor are catastrophic and atmospheric bounces to traditional stocks and bonds. But when the shit hits the fan it really distributes the proceeds widely, as we saw earlier this month as the effects of the coronavirus caused a monumental dive in Bitcoin’s fortunes. Since then, though, it’s been in recovery. First in drips and drabs, and then occasionally in large 10% bounces and finally to where we are today, with Bitcoin’s price resting at roughly between $9,000 and $9,500, which is up from its lowest point three weeks ago at $6,773.20.
Hut 8 Mining (HUT.T) went into damage control over the weekend following Bitcoin’s precipitous 46% crash in the wake of the coronavirus, optimizing their mining operations by running its equipment in the most cost-efficient modes possible.
Proof-of-Work mining exacts a heavy electricity cost. It involves racks of specialized servers all focused on solving a difficult mathematical equation. Those servers eat ridiculous amounts of power not just to power the computations, but in air conditioning because those ASIC rigs get hot.