Greenidge’s average monthly cash burn rate in the past two months was approximately $8 million. That is typically used to describe the rate at which a company spends capital to finance overhead before generating a profit or loss from operations. About $5.5 million of that cost was associated with principal and interest payments to NYDIG. The firm expects to have a similar cash burn rate and similar payments to NYDIG in December, according to the filing.

The Fairfield, Connecticut-based miner has a natural gas plant that powers its Bitcoin mining facility in Dresden, New York. It is one of the earliest and largest crypto-mining firms in the state. While Greenidge’s current operations remain intact, New York Governor Kathy Hochul signed one of the most restrictive laws in the US on crypto mining last month with a two-year moratorium on new permits from the miners that are powered by fossil fuel. 

Eoin Treacy's view

Bitcoin is a liquidity barometer. When prices multiply, the fear of missing out creates demand for leveraged plays on the price of both bitcoin and altcoins. It encourages miners to leverage up to increase their chances of securing additional coins and it attracts new funding mechanisms to ensure maximum leverage is made available to the most risk-tolerant traders as the promise of massive gains proves siren-like. During crypto winters, this entire process goes into reverse and many operations go bust.

It is worth considering that the best time to start a crypto exchange is around now. FTX was founded in May 2019. That was shortly after the low and about a year ahead of the 2020 halvening. The next halvening will be in April 2024.

The best time to sell an exchange and an associated token is about 18 months after a bitcoin halvening. Wait too long and the chances of surviving a crypto winter are frighteningly small. The only way to survive the winter is to avoid the temptation to milk the bull market for all it is worth. Of course, that begs the question what is the point of starting an exchange and your own token if you are not willing to do that?

This is a good example of how Heisenberg’s uncertainty principle is applied to markets. The more well -understood a cycle or trend is, the less likely it is to repeat. Bitcoin’s drop below the 2017 peak is a significant trend inconsistency. The declining multiplication factor is another inconsistency that implies more leverage is required to repeat prior profit opportunities. The stock-to-flow chart is also not adhering to the prior cycles.
Leaders lead in both directions and they lead for a reason. The deteriorating consistency of trends in the crypto sector suggest the underlying theme which supported the trend is changing. Bitcoin was developed as a response to quantitative easing and bank bailouts. The fact it is less consistent suggests the odds are we are in a new macro environment where central banks will not be as generous.