While BTC has fallen from a massive market plunge to $19,000, its network hash rate has exploded to an all-time high.
Bitcoin miners are currently earning the smallest reward compared to applied hash power in history, which has put the industry under significant revenue pressure. as such open With blockchain intelligence platform Glassnode, Bitcoin’s hash price has dropped to as low as $66,500 per Exahash.
More misery for bitcoin miners
The hash rate basically acts as a measure of the daily revenue computing power hash for a given network. The meter found some relief in the middle of the third quarter as heat waves during the US summer reduced network fragmentation. This in turn coincided with a slight recovery in the spot price of the crypto-asset.
The new all-time low hash rate comes as Bitcoin mining difficulty reached a lifetime high of $36.84 trillion after a fresh 3.44% increase. The difficulty adjusts automatically every 2016 blocks that occur approximately every two weeks. This ensures a constant frequency of the transaction process on the network regardless of the hash rate at any given time.
However, this is a blow to miners as sharp income pressures continue in the industry. They are now facing more pressure to put in additional resources to do the same amount of work. With current costs, it will become increasingly difficult for miners, even with the most efficient rigs and very competitive energy prices, to break even. As a result, these entities are looking elsewhere to lock in profits to keep their business going.
The price of Bitcoin “dangerously” approaching the cost of production is another cause for concern.
Revenue takes a hit
Rising energy prices and BTC, which has fallen by nearly 60% so far this year, has disappointed miners. According to a recent Arcane Research report, miners on average saw an 81% decline in revenue from their peak in October 2021. Additionally, most public miners saw their gross margins drop to a 30%-40% range from 80% to 90% on the surface.
Unfortunately, most miners today are exposed to varying degrees of rising energy prices. Europe’s mining industry has already been wiped out by the energy crisis, but American miners are also feeling the heat.
Energy prices in the United States, where a large portion of miners are on an industrial scale, have risen significantly and are likely to continue to rise as natural gas prices rise.”
Subsequent Bitcoin hash price appeared at all-time lows amid dismal miner profitability for the first time on CryptoPotato.