As Bitcoin’s price remains firmly stuck below $10,000, Wall Street players and others have turned their attentions to how the price levels are causing potential financial problems for miners.
Morgan Stanley (NYSE:MS) was the latest to join the conversation, releasing a note on the subject to its clients on Thursday.
Also on Thursday came the most recent earnings results from Taiwan Semiconductor Manufacturing. Investors learned that the company had concerns about the uncertainties surrounding crypto mining, and had lowered its guidance.
Morgan Stanley
Like other observers of the mining situation, Morgan Stanley has pegged a specific price at which mining may not be worth the while of the many who had once seen it as a lucrative means to make money.
The magic price range that observers of mining believe should remain on the radar screen is between $8,000 and $8,600. If Bitcoin’s price goes below $8,000 again and stays there, mining will likely be unprofitable for them.
In its note released by Morgan Stanley Wednesday, equity analyst Charlie Chan reportedly said:
"We estimate the break-even point for big mining pools should be US$8,600, even if we assume a very low electricity cost (US$0.03 kW/h).”
In the note, Chan went on to say that if Bitcoin can't rise to at least $8,600 soon, “miners will likely find it unprofitable to keep creating the cryptocurrency.”
We told you Wednesday about a report by Bloomberg that made similar findings. According to this report, if Bitcoin’s price drops below $8,000 again for an extended period, “there will likely be a swifter consolidation to industrial-scale mining.”
The media outlet reported:
That could knock out the last guy-in-a-dorm-room operations and leave holders of the currency vulnerable to the dictates of the big miners.
Chip maker’s assessment
For its part, Morgan Stanley estimates about 10% of the chipmaker's revenue hinges on crypto mining demand.
In the note it released, it was stated:
“…we think the Bitcoin mining hardware demand and price will decline further…”
While Morgan Stanley was releasing its note on mining to clients Thursday, another mining player was making its own moves.
Taiwan Semiconductor Manufacturing lowered its 2018 revenue guidance to 10% growth from 10% to 15% partly because of the uncertainty surrounding crypto mining demand. The change was announced during the company’s Q1 2018 earnings call.
As far as the uncertainties are concerned, the company’s co-CEO and President Mark Liu said:
“We see a very strong demand in the first quarter from cryptocurrency and - in the first quarter. So during this second quarter, this is start of the second quarter, we see some weakness on 28-nanometer, but the rest of the technology is still very strong on cryptocurrency.”
This article appeared first on Cryptovest
