Miners Face Profit Pressures as Bitcoin Hash Price Hits Lowest Level in Years
Following the record-breaking earnings on Bitcoin (BTC) halving day, miners are now grappling with a new reality. Despite a high network hash rate, their revenues have taken a hit, leading to a decline in profits.
The hash price, which represents the average revenue earned by miners per performed hash, has dropped to its lowest level since October 2023. Crypto analytics firm CryptoQuant reports that the hash price fell from nearly $0.12 in early April to $0.07 after the halving. This comes after reaching a peak of $0.19 on halving day.
Bitcoin’s halving event reduced miners’ block rewards from 6.25 BTC to 3.125 BTC, while operational costs in the sector remained unchanged. Ki Young Ju, the CEO of CryptoQuant, estimated that the cost of mining with Antminer S19 XPs would double from $40,000 to $80,000 after the halving.
Despite the reduction in rewards, the total network hash rate has remained stable since the halving, indicating that BTC mining is still profitable at current prices. Bitcoin has held above the $64,000 mark since April 19, according to Cointelegraph Markets Pro.
While it is still too early to gauge the long-term effects of the halving on the hash rate, miners appear to be operating at the same rate as before. CryptoQuant noted in a report that the total network hash rate remained steady at 617 EH/s after the halving.
On the day of the halving, transaction fees reached record levels compared to total miner revenue. Transaction fees accounted for 75% of total miner revenue, amounting to approximately $80 million. However, it has since dropped to around 35% of total miner revenue.
Although the immediate impact seems stable, the long-term consequences on the hash rate and overall miner activity could change. Historically, post-halving periods have seen miners exiting the market due to high operational costs. Factors such as Bitcoin price fluctuations and electricity cost changes are likely to play crucial roles in the mining industry’s future.
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