Key Points
- Bitcoin network’s hashrate hit a record high of 742 EH in September, increasing mining costs and reducing miners’ profits.
- Miners sold off 3000 BTC due to the rising operational costs and declining revenue.
The Bitcoin [BTC] miners had a tough time in September as the network’s hashrate reached a new peak, impacting their earnings.
The network hashrate, which measures the computing power required to mine BTC, reached a record high of 742 EH on the 1st of September.
Impact of High Hashrate
While a high hashrate indicates better network security, it also increases the network difficulty, which measures how challenging it is for miners to find the next BTC block.
This means that miners needed more computational power to mine Bitcoin, which was becoming increasingly difficult to find.
As a result, the average cost of mining a single BTC could potentially rise, putting more pressure on smaller miners.
On 3rd September, the total cost to mine a single BTC was estimated at $71.5K, while the average spot price for the asset on the same day was $57.4K.
This significant difference at the start of September strained miners’ profits, with daily revenue dropping from over $36 million in late August to around $26 million in September.
Miners Selling Off BTC
As a result of these increased production costs and declining revenue, miners may have been forced to sell their BTC holdings.
CryptoQuant data shows that the Miner Reserve, which measures the total BTC held by miners, dropped from 1.817 million BTC to 1.814 million coins in a few days.
This indicates that miners sold off part of their holdings, with a total of 3000 BTC being sold off in September, most likely to cover the increasing operational costs.
At the time of writing, BTC was valued at $57.9K. A sustained minor sell-off could apply more downward pressure on the BTC price.
Therefore, this situation is worth monitoring alongside macro updates.
