In recent data, the Bitcoin network’s hash rate achieved an impressive 414 exahashes per second (EH/s) on August 18. It signifies a 54% increase since the onset of 2023 and an 80% leap over the past year.
The Paradox: Rising Hash Rate Amid Plummeting Mining Revenue
Despite this climb in hash rate, Bitcoin miners face grim figures in terms of profitability. Mining revenue, commonly called “hash price”, is witnessing lows reminiscent of the challenging times after the FTX’s downfall in November 2022.
By delving deeper, Bitcoin hit a market cycle trough during those testing times, standing at approximately $16,500. As per HashPriceIndex, the current statistics reveal a stark revenue of merely $0.060 for every terahash daily.
It is a drastic drop from the figures observed in early May 2023. The rush surrounding the Bitcoin Ordinals inscription then led to heightened block space demand.
Miners’ Reliance on Stock Sales
The downturn in revenue has forced many miners into a corner. Reports suggest a growing dependence on proceeds from stock sales to navigate through this bearish phase in the market. An intriguing piece from Bloomberg on August 24 highlighted that a dozen of the dominant publicly-listed miners amassed an estimated $440 million via stock sales in the second quarter.
The Bitcoin network’s security resilience remains unquestioned, with hash rates consistently setting new benchmarks. However, the immediate future for miners appears challenging. As the ecosystem balances itself, miners and stakeholders eagerly await the next phase in this financial odyssey.
One crucial factor is the 2024 Bitcoin halving. Miner rewards will be slashed by 50%. Many anticipate a BTC price increase by then – or perhaps earlier. However, if the price doesn’t increase, many miners will suffer from unprofitable operations. The impact on the network remains unclear, but tough times may be ahead for the leading cryptocurrency.
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