It’s not been a great week so far. After Bitcoin hit 20k or there about last week, it’s been pretty much an endless parade of negative and near negative news. The result has been the bitcoin price USD dropping dramatically, in some exchanges getting as low as $14,000 before bouncing back a bit. As I type this, the price is 16910.01 US Dollar, but that is still about 15% off the top.

Second bad news for me (personally) is that Hashflare has raised their prices for bitcoin mining hash rate. If I want to add another 1 TH/s hashrate, it now costs $220 US – that is 50% or more higher than what I paid 3 weeks ago. That isn’t good news at all. It’s a sizable increase, that is a little hard on my bottom line plan to keep adding hashrate as I go.

Results have also plummeted. I am seeing daily income (in bitcoins) off about 30-35% from peak. With the Bitcoin Price USD down as well, it means that the daily “maintenance fee” (ie, their cut) has gone up, which also hurts. Averaged over the month, the daily results per 1 TH/s is down about 15% from peak, and with the current tend, that will only get worse for now.

The effects for me as a bitcoin miner is a haircut on my year end projections of about $2000-$3000 US. That isn’t a happy feeling, I can tell you. Most people would tell me it’s just the normal ups and downs, but I have some concerns.

First off, Bitcoin Cash is on the rise, big time. It’s moved about 40% up this week, in part because it was let slip that it will get added into Coinbase exchange, so people will be able to buy and sell their way in and out of the currency. As Bitcoin Cash is apparently a little easier to mine at this point, it seems like people are moving that way. Sadly, with a cloud mining setup, I don’t get to make that choice, I am stuck on Bitcoin no matter what.

The other part is mining difficulty. On December 6th, it increased 18%, which is a big part of the drop in returns I am seeing. Basically, you need 18% more mining to make the same amount of money, or on a daily basis with the same levels you get 18% less returns. This week it has gone up again by a similar level, wich is why my results are off 30% or more. If the pattern continues going forward, my mining rigs will be “under water” before the 1 year term is complete. By underwater, I mean that they will not generate enough income to cover the daily maintenance. It the difficulty continues to raise by 18% every two weeks or so, I will be underwater around September. That will change cloud mining from being quite profitable to doubtful. With the increase in cost to add TH/s to the process, it doesn’t look as promising as it did.

The funny part is this: I can survive the price of bitcoin dropping to about $4000 and still make a bit of money mining. But the increases in difficulty are really eating away at the income at a nasty pace, such that it will be better to turn it off at some point then it will be to continue. I would need the price of bitcoin to go very hard into the records (probably over $30,000) to really make good numbers.

So for now, I let it run, but plans to add hashrate have, for the moment, been shelved.