Key Points
- Bitcoin’s hashprice hits record low, sparking concerns of another miner profitability crisis.
- Increasing network difficulty and decreasing daily miner revenue exacerbate miners’ challenges.
Bitcoin’s hashprice, a measure of miner revenue, has plummeted to an all-time low. This has led to apprehensions of a potential profitability crisis for Bitcoin (BTC) miners.
Data from the Hashrate Index indicates that the hashprice fell to $40 per computing power unit per day on August 8th. This value is even lower than the $60 per unit seen during the 2022 crypto winter, a period marked by a significant BTC miner crisis.
Decline in Miner Revenue
Along with the dip in hashprice, the BTC Miner Revenue Per Day also saw a drop. It went from $40 million on July 29th to approximately $24 million on August 7th, as per data from YCharts.
The situation for miners is further complicated by the increasing BTC network difficulty. This difficulty reached a record high of 90 trillion in August, up from 80 trillion in mid-July. The rise signifies a nearly 10% increase in the computing power required to mine BTC or find a block.
Pressure on Miners
This could place immense pressure on smaller-scale miners, possibly forcing them to sell their BTC holdings to cover operational costs or cease operations. On August 7th, the average mining cost stood at $83.6K against the BTC price of $55K, according to MacroMicro data. This represents a significant shortfall of over $23K.
However, well-optimized miners like Marathon Digital, with an average mining cost of $43K, may not face the same level of concern. CryptoQuant founder Ki Young Ju suggests that these miners would only need to worry if BTC prices remained below their cost for an extended period.
On August 7th, the BTC Miner Reserve decreased by over 1,100 BTC, indicating that some miners sold off part of their holdings. This metric tracks total BTC miner holdings, which have been on the rise since late July, showing that they held on even during last week’s market dump.
However, these miner sell-offs could also exert downward pressure on BTC prices. At the time of writing, BTC was trading above $58K and could potentially reach the previous range-low at $60K. Nevertheless, a prolonged miner dump could potentially hinder this recovery.
