Since the halving, Bitcoin mining has become more cost-intensive than ever, with the asset’s “hashprice” reaching its lowest levels in the past two months, according to data from Hashrate Index.
The Difficulties Of Bitcoin Mining
According to Hashrate Index data, the hashprice stood at $92.20 per petahash/second (PH/s) per day on April 19, the day of the Bitcoin halving. Within a week, it plummeted to $57.53, further declining to an unprecedented low of $44.76 by May 1.
The hashprice metric, denoted as USD/PH/Day, signifies the daily earnings miners generate per unit of energized hashrate they possess.
Hashrate refers to the speed at which miners produce hashes, which are numeric solutions to the computational problems required for mining a Bitcoin block. For instance, a hashrate of one petahash per second (1 PH/s) equals one quadrillion hashes per second.
Hashprice is primarily influenced by several key factors including the Bitcoin block reward size, the price of Bitcoin itself, and the total hashrate of the Bitcoin network. The halving on April 19 reduced the fixed Bitcoin block reward from 6.25 BTC to 3.125 BTC, which naturally contributed to a decline in hashprice.
Additionally, Bitcoin’s price has experienced a significant downturn in June, dropping by 11% amidst selling pressures attributed to actions by the governments of the United States and Germany. Furthermore, concerns have arisen regarding an impending wave of sales from Mt. Gox bankruptcy claimants expected next month.
As of June 27, the hashprice for Bitcoin stands at $47.80 per petahash per day.
Reeling Back Mining Efforts
Since the halving, Bitcoin miners are facing increased challenges with diminishing profitability, prompting indications of a pullback in less lucrative mining activities. According to Blockchain.com, Bitcoin’s total hash rate has dropped from 625 exahashes per second (EH/s) to 581 EH/s.
Miners have been significant contributors to Bitcoin sales this month. For instance, Marathon Digital (MARA), the largest publicly traded Bitcoin mining firm, sold 1400 BTC within the first ten days of June, compared to 390 BTC sold throughout the entire month of May.
On June 9 alone, miners collectively sold 3000 BTC through exchanges and an additional 1200 BTC through over-the-counter (OTC) desks, marking the highest daily amount since March.
In a recent announcement, Marathon Digital revealed its shift towards decentralizing its mining operations to include Kaspa, an alternative proof-of-work cryptocurrency network. Since September, Marathon Digital has accrued $16 million from its involvement with Kaspa.
