According to Hashrate Index data, which tracks the correlation between hash rate and revenue accrued by miners over time, Bitcoin mining operations are currently generating income at near record lows.
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Bitcoin Miner Revenue Falling, What's Next?
The current daily cost for Bitcoin miners stands at $0.059 per Tera Hash (TH), which is only a few cents above the level recorded in late November 2022. This trend may not be particularly exciting for miners. During last year's crypto winter, when prices fell below $16,000, the hash price - which measures the potential revenue expected from deploying 1 Tera Hash of hash rate to the Bitcoin network per day - hit its lowest point in three years.
Bitcoin supporters are optimistic that prices will recover in the second half of 2023, despite the fact that miners are currently facing lower revenue. The impact of this on their operations remains to be seen, as miners rely on income generated from deploying hash rate to cover operational expenses and potentially pay shareholders.
The hash price of Bitcoin reached its highest level in 2023 on May 8, at $0.095, but has since dropped by over 40%. This could mean that miners are struggling to compete as the hash price falls. This trend has emerged as the hash rate has been increasing to record levels, with more miners powering up their mining rigs.
The total Bitcoin hash rate, which measures the computing power channeled to the network, rose from 269 EH/s in early January 2023 to 465 EH/s in early July 2023. It has since dropped to around 329 EH/s, which is still higher than the highs of 2022.
More Rigs, Higher Hash Rate
The Bitcoin network's mining difficulty level reached its highest point last week, with a rising hash rate automatically triggering a 6% increment to 55.62 T. Throughout the year, difficulty levels have been on the rise due to an increase in hash rate, with January's price recovery and subsequent hash rate spike leading to the biggest increase of 10%. Tether Energy, an affiliate of Tether Holdings, which issues USDT, is planning to connect its rigs in Latin America, which is likely to increase competition for existing miners, including Riot Blockchain, and result in further hash rate growth in the coming months.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.