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While BTC has come down from a massive bear market dump to $19,000, its network hash rate has exploded to an all-time high.
Bitcoin miners are currently earning the smallest reward relative to hash power applied in history, which has put the industry under extreme income stress. As revealed by the blockchain intelligence platform, Glassnode, Bitcoinâs hash price has dropped to its lowest level of $66,500 per Exahash.
More Woes for Bitcoin Miners
Hash price essentially serves as a measurement for the daily revenue compute power hashing for a given network. The metric found some respite in the middle of Q3 as heat waves during the American summer drove a decline in the networkâs hash rate. This, in turn, coincided with a slight recovery in the spot price of the crypto-asset.
The new all-time low in hash price comes as Bitcoinâs mining difficulty reached a lifetime high of 36.84 trillion after another recent increase of 3.44%. The difficulty automatically adjusts every 2,016 blocks that occur almost every two weeks. This ensures a steady pace for the transactions process on the network irrespective of the hash rate at any given time.
However, this is a blow to the miners as acute income stress in the industry continues. They are now facing more pressure to spend additional resources to execute the same amount of work. At the current costs, it is only becoming increasingly difficult for miners, with even the most efficient rigs and very competitive power rates, to break even. As a result, these entities are looking elsewhere to book profits to keep their businesses afloat.
The price of Bitcoin getting âdangerously closeâ to its cost of production is yet another cause of concern.
Revenue Takes a Hit
Soaring energy prices and BTC down by almost 60% year-to-date have led to disappointing revenue for miners. According to Arcane Researchâs latest report, miners, on average, have seen revenue fall 81% from a peak in October 2021. Additionally, most public miners witnessed their gross margins plunge to a range of 30%-40% from an 80%-90% area.
âUnfortunately, most miners today are, to a varying degree, exposed to rising power prices. The mining industry has already become almost eradicated in Europe due to the energy crisis, but American miners also feel the heat.
Power prices in the US, where a significant portion of the industrial-scale miners are located, have increased considerably and will likely keep rising as natural gas prices go up.â
The post Bitcoin Hash Price at All-Time Lows Amidst Dismal Miner Profitability appeared first on CryptoPotato.
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