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Bitcoin Hash Rate Declines as Mining Firms Shut Down Unprofitable Rigs Post-Halving

The Bitcoin network’s hash rate has seen a notable decrease, with mining operations shutting down unprofitable rigs post the fourth Bitcoin halving.

According to blockchain.com data, the hash rate hit its lowest point in more than two months, reaching 575 exahash per second (EH/s) on May 10. Since then, there’s been a slight uptick, with the current rate standing at 586 EH/s.

This decline is attributed to miners powering down rigs that no longer yield profits, as noted by James Butterfill, CoinShares’ head of research, in a recent X post.

Bitcoin Hash Rate to Surge Again

CoinShares, in a recent blog post, forecasted a temporary decline in Bitcoin hash rate but anticipates a surge in the years ahead.

The rise in Bitcoin mining costs post-halving, alongside escalating electricity expenses, are identified as the primary drivers behind the hash rate reduction.

To counter this trend, the report proposes various mitigation tactics, such as optimizing energy expenditure, enhancing mining efficiency, and securing advantageous hardware procurement agreements.

Nazar Khan, TeraWulf’s co-founder and COO, opines that only smaller mining ventures utilizing less energy-efficient equipment may encounter difficulties following the 2024 halving.

TeraWulf, valued at over $670 million and recognized as one of the globe’s leading Bitcoin mining enterprises, intends to expand its operations despite the diminishing block rewards.

Nevertheless, the profitability of these operations is heavily contingent upon electricity expenses. As per the Hashrate index, older ASIC models like the S19 XP and M50S++ operate at a deficit when electricity costs exceed $0.09/kWh.

At rates of $0.08/kWh or above, even the Pros and M50S+ models become unprofitable. Further, the S19j Pro+, j Pros, and M30S++ models will encounter challenges with electricity costs ranging between $0.06 and $0.07/kWh.

As mining firms navigate this evolving landscape, optimizing energy efficiency and trimming operational costs will emerge as imperative strategies for sustaining profitability within the Bitcoin mining sector.

Bitcoin Miners Adjust Operations After Halving

Bitcoin miners, including Riot Platforms, have been recalibrating their operations post the April 20 halving event, which slashed mining rewards from 6.25 BTC to 3.125 BTC, equivalent to approximately $180,600 presently.

Reports suggest a notable outflow of Bitcoin from miners could loom in the months post the upcoming halving event.

In a recent analysis, Markus Thielen, head of research at 10x Research, approximates that Bitcoin miners could potentially liquidate around $5 billion worth of BTC post the halving.

According to asset manager CoinShares, Riot, TeraWulf, and CleanSpark stand out as well-positioned companies to navigate the impending challenges.

It’s noteworthy that the number of new Bitcoin etched daily has sharply declined, dropping below 250 for the past six days. Initially, this protocol offered a much-needed revenue boost for Bitcoin miners aiming to offset the impact of the recent halving.

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I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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