Key Points
- Bitcoin (BTC) miners are experiencing reduced profits due to high network hash rate and lower revenues.
- The hash price has reached its lowest level since October 2023, following the Bitcoin halving event.
After achieving unparalleled earnings on the day of Bitcoin (BTC) halving, miners are now facing a different reality.
This includes a high network hash rate and reduced revenues, which are negatively impacting their profits.
Hash Price Drops Post-Halving
The average revenue a miner receives per hash, known as the hash price, has dropped to its lowest point since October 2023.
CryptoQuant, a crypto analytics company, reported that the hash price for miners fell from nearly $0.12 in early April to $0.07 after the halving, following a peak of $0.19 on the day of the halving.
The halving event of Bitcoin cut the block reward for miners from 6.25 BTC to 3.125 BTC, while the industry’s operational costs remained constant.
Ki Young Ju, the CEO of CryptoQuant, projected that the mining cost with Antminer S19 XPs would rise from $40,000 to $80,000 after the halving.
Miners Still Profitable Despite Reduced Rewards
Despite the drop in rewards, the total network hash rate has remained stable since the halving event, indicating that BTC mining is still profitable at Bitcoin’s current prices.
Bitcoin has maintained a price above the $64,000 mark since April 19.
According to a report by CryptoQuant, “Although it is still too early to see any long-term effects of the halving on the network hashrate, miners seem to be running operations at the same rate as before the halving”.
The total network hash rate remained steady at 617 EH/s after the halving.
On the halving day, transaction fees reached an all-time high relative to the total revenue generated by miners, accounting for 75% of total miner revenue, which was around $80 million.
Since then, it has decreased to about 35% of total miner revenue.
While the immediate effects indicate stability, the long-term impacts on the hash rate and overall miner activity could still vary.
In the past, miners have left the market after halving periods due to high operational costs.
Factors such as Bitcoin price movements and changes in electricity costs are likely to play significant roles in the mining business.