Covid-19, a "serious" risk for Bitcoin mining

The mining of cryptocurrencies, an activity in turmoil in times of pandemic and quarantine. He is the specialist Riot Blockchain who sounds the alarm and worries about risks for its activity.

The mining, an activity like the others in times of epidemic and global confinement. Many businesses, considered non-essential, are now stopped. This classification also applies to Riot Blockchain and its operations.

This qualification is not without consequence, warns the company in a financial document sent to the American stock exchange authority, the SEC. In the section dedicated to risks, two scenarios relating to Covid-19 are thus identified.

Employees unable to get to the workplace

Thus, in the jurisdictions on which the activities of Riot Blockchain, these have been classified as non-essential. Consequently, the authorities could decide, for health reasons, that "we are not allowed to access our mine or our offices" warns the company.

The epidemic could therefore "seriously disturb" the mining of Bitcoin from this specialist. Besides, he is already observing disturbances and plans to go through other turbulences because of the Covid-19.

We have experienced and will experience disruptions to our business activities resulting from quarantine, containment or other gestures and restrictions on the ability of our employees to do their jobs, ”acknowledges Riot Blockchain.

Without being able to properly operate its mining machines, it is the company's ability to bitcoin mining which will be affected, with direct financial consequences. Confinement and arrest of minors are not the only risks identified, however.

The supply chain under tension for Chinese equipment

The crypto actor also specifies that his Supply Chain is impacted by the global epidemic. It is indeed the supply of mining equipment that is affected because of the border controls put in place by the China.

Limiting the flow of goods in the country, where Riot's suppliers are based, therefore constitutes a risk for its production and mining. But as in other sectors, the recession triggered by the Covid-19 also presents a economic risk.

The effects on the global economy are likely to have "a negative impact on the demand for bitcoin and our operating results," said Riot. A bad crisis for the company.

At the end of 2019, it finalized the payment of an order for $ 6.35 million for equipment to extract Bitcoin. The company is thus equipped with 4000 Antminer S17 Pro to mine cryptocurrency. Making the purchase of its equipment profitable is therefore vital.

Other mining farms have expressed similar concerns about the health crisis, but also the economic consequences and the plunge in cryptocurrency prices. This was for example the case of PandaMiner in February. Based in China, its operations suffered from the quarantine and lack of staff. Bitcoin halving in May could leave its mark in this industry more than ever.