Plummeting Hash Price Challenges Bitcoin Miners
Bitcoin’s hash price, a critical measure of miner revenue per terahash, has recently approached its all-time low. According to Luxor Technology’s Hashrate Index, Bitcoin’s hash price fell by nearly 52%, reaching $0.0459 per terahash second on June 24, down from a two-month high of $0.095 on June 8. Though it nearly hit the record-low of $0.0447 set on May 1, it has since rebounded slightly to $0.0479.
Impact on Bitcoin Miners
On June 23, Adam Ortolf, a developer at Bitcoin mining firm Upstream Data, commented on social media platform X that Bitcoin miners are now in “survival games.” Ortolf noted that the hash power has dropped significantly, causing miners to endure substantial financial strain with the hash price hovering around $0.05 TH/s.
Despite these challenges, most Bitcoin mining machines remain profitable for now, as stated by Mitchell Askew, head analyst at Blockware Solutions. However, the profitability is under pressure due to the recent downturn in Bitcoin’s price, miner rewards, and mining difficulty.
Factors Affecting Hash Price
- Bitcoin Price Decline: Over the last week, Bitcoin’s price has decreased by 6.8%, settling at $60,590. This decline is influenced by negative market sentiment following news that Mt. Gox plans to sell $8.6 billion worth of Bitcoin to creditors and recent outflows from US-based Bitcoin exchange-traded funds.
- Reduced Miner Rewards: The fourth Bitcoin halving event in April 2020 cut the block subsidy from 6.25 BTC to 3.125 BTC, currently worth $188,800. This reduction in rewards has directly impacted miner revenue.
- Mining Difficulty: The network’s mining difficulty, which indicates how hard it is to mine a block, has dropped by 5% to 83.68 trillion hashes, after hitting a record-high on April 25.
Miner Sell-Off and Reserves
Amid these challenges, Bitcoin miners have been selling off significant portions of their holdings. Miner reserves fell to 1.90 million Bitcoin on June 19, marking the lowest level in over 14 years. This sell-off reflects the financial pressures miners face as they navigate the low hash price environment.
