The cryptocurrency crash has shaken everything from corporate finances to ETFs and mining infrastructure.
The recent cryptocurrency market crash is extending beyond simple price declines, impacting corporate financial statements, exchange-traded funds (ETFs), and even mining infrastructure. The plunge in Bitcoin (BTC) and Ethereum (ETH) is exacerbating the impact on companies, and ETF investors are facing the shadow of volatility for the first time.
The winter storm that swept across the United States this week disrupted mining operations, exposing just how vulnerable mining infrastructure remains to the power grid. Meanwhile, a former cryptocurrency mining company transformed into an AI infrastructure company demonstrates the potential for repurposing existing mining equipment.
Bitmine's Ethereum-centric financial strategy leads to a loss of 9 trillion won.
As the price of Ethereum fell below $2,200 (approximately 3.22 trillion won), BitMine Immersion Technologies, a major Ethereum holder, incurred a valuation loss of approximately $7 billion (approximately 10.241 trillion won). With the recent purchase of 40,302 new ETH units, BitMine's total holdings approached $9.1 billion (approximately 13.3133 trillion won), making it even more vulnerable to price volatility.
Tom Lee, the company's chairman, responded to these criticisms by explaining, "Bitmine is designed to track the price of ETH, so losses are inevitable in a bear market." In reality, the current losses are not realized but rather valuation losses, meaning they remain on the books until sold. However, this case clearly illustrates the risks of financial strategies based on digital assets.
BlackRock Bitcoin ETF investors are entering a losing streak.
As Bitcoin fell below $80,000 (approximately 117.04 million won), investors in BlackRock's iShares Bitcoin Trust (IBIT) also saw their returns turn negative. Bitcoin is currently falling further below $75,000 (approximately 109.72 million won), further dampening investor sentiment.
IBIT is a success story, having attracted $70 billion (approximately KRW 102.493 trillion) in assets among BlackRock's ETFs at a rapid pace. However, the current downturn is reminding investors that ETFs are not necessarily safe assets. Bob Elliott, Chief Investment Officer (CIO) of Unlimited Funds, stated, "The average investment in IBIT is currently in a loss-making state."
US Winter Storm Halves Bitcoin Mining Output
The winter storm that swept across the United States in late January also dealt a significant blow to the Bitcoin mining industry. According to CryptoQuant, the average daily mining output of public miners suddenly plummeted from 70-90 BTC to 30-40 BTC. This was a temporary measure taken to reduce power consumption or even halt operations entirely, thereby avoiding strain on the local power grid.
While mining volumes have recovered as weather conditions have improved, the data confirms that the mining industry remains significantly dependent on the availability of electricity infrastructure. Major US mining companies, including CleanSpark, MARA Holdings, Bitfarms, and Iris Energy, are included in this data.
Old mining rigs are being reborn with AI infrastructure.
The case of CoreWeave illustrates how cryptocurrency mining infrastructure is being repurposed as an AI data center. When Ethereum transitioned from Proof-of-Work (PoW) to Proof-of-Stake (PoS), leading to a sharp decline in demand for graphics card (GPU)-based mining, CoreWeave pivoted to AI and high-performance computing (HPC).
While Coweave is no longer a cryptocurrency company, its transition strategy is influencing similar companies like HIVE Digital, Hut 8, and Mara Holdings. Coweave recently attracted attention by securing a $2 billion equity investment from NVIDIA, demonstrating that what was once mining infrastructure is being re-evaluated as "core infrastructure" in the AI era.
This sell-off is having a profound impact beyond cryptocurrency price analytics, extending to asset management, infrastructure operations, and investor sentiment. Until the market rebounds, both companies and investors will likely once again recognize the importance of risk management.
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This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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