The financial woes for the world’s second largest cryptocurrency by total market capitalization continue as Ether touched an annual low of $175.99 earlier today. As a result of this, the currency has now depreciated more than 9.4% in value over the span of the past 24 hours.
ETH Mining is No Longer Profitable
While reports of various ICOs cashing out their Eth holdings last month are being attributed to this latest downturn in the currency’s fortunes, none of these stories have any solid backing to them.
However, one thing which is now clear is that Ether mining is now rapidly turning into an unprofitable venture whichever way one chooses to look at it. As a direct consequence of this, the overall hash power of the network has gone down quite severely, causing a further loss of confidence from investors in this digital asset.
Last but not least, rising electricity rates and other peripheral costs have not helped improve matters either.
ASIC Mining Rigs Could Destroy Ether’s Mining Market
With Ether’s latest hard-fork, Constantinople, just around the corner, this latest change will mean a reduction in the rewards doled out to miners from 3 ETH to 2 ETH per block. While on paper this change might not seem like much, but over a long period of time, this reduction in block rewards could drive potential currency miners away from Ether.
To elaborate further on this issue, figures that can be found on Etherscan show that as of now, nearly 6,000 blocks are currently procured per day by miners— which roughly translates to a total payout of 17,000 ETH (roughly $3.4 million).
However, if ASIC Ethereum mining rigs continue to gain traction, casual miners could soon be driven out from this once lucrative market sector.
In this regard, Brian Venturo, CEO of Atlantic Crypto, was noted as saying:
“This community of small miners, hundreds of thousands, is now faced with the economic reality that selling their used hardware may be a better outcome than continuing to participate in ETH,”
Since the start of this latest financial massacre, the cryptocurrency market as a whole has taken a beating of unprecedented proportions.
As can be seen from the chart above, since September 5, the total market cap of the digital asset sector has fallen by over 20%.
Ether Price Chart Courtesy of Tradingview.com