Dropping oil prices will benefit crypto miners - Andreas Antonopoulos

Andreas Antonopoulos, a famous Bitcoin educator, believes the recent downturn in oil prices is beneficial for crypto miners worldwide, especially those at the Bitmain mining facility in Texas. In a recent video he posted on his YouTube channel, Antonopoulos explained that the dropping prices would benefit crypto miners by providing cheaper electricity worldwide, but “not equally worldwide.” Miners based in the US (which gets 36% of its energy from petroleum) and Texas, in particular, can take advantage of these cheaper costs. 

One of the biggest new mining operations opened in the United States in the state of Texas and I can’t imagine that that is a coincidence… it probably had a lot to do with the fact that the US had 12,000 barrels per day. It is the largest oil producer in the world because of fracking. Therefore, there may be really good opportunities for cheap power, which would suddenly make U.S.-based miners much, much more competitive and profitable.

China is still one of the top players in the cryptocurrency mining industry. According to an earlier Cointelegraph report, Chinese Bitcoin miners were responsible for about 66% of the global hash rate in 2019. Antonopoulos said that most Chinese crypto mining is done with rigs primarily powered by coal plants. Nevertheless, falling oil prices would still result in financial benefits for Chinese miners, according to him. 

The Bitcoin educator added that energy producers who are not reliant on petroleum might attempt to stay competitive by operating at a loss. This will result in cheaper electricity for miners while the oil prices are down. 

Because energy and electricity is a fungible commodity, if you are connected to a coal-fired power plant and somewhere else, a gas-fired or oil-fired power plant has half the cost of energy because its oil is much cheaper, it’s going to cost less to get electricity from your coal plant…

Antonopoulos said that the real competition between buyers is determined based on “the unit cost of electricity, which is dominated in some places by the cost of oil.”