The revenue generated from Bitcoin mining, also known as the “hash price,” has reached a record low, similar to levels seen during the collapse of FTX in November 2022. Despite this, the hash rate, which measures the computational power required to mine Bitcoin, has reached an all-time high.
According to Blockchain.com, the Bitcoin network’s hash rate peaked at 414 exahashes per second (EH/s) on August 18th, representing a 54% increase from the start of 2023 and an 80% increase over the past year. This surge in hash rate signifies increased security for the network.
However, Bitcoin miners are facing difficulties as their revenue has plummeted. The revenue per terahash per second per day, as calculated by HashPriceIndex, is currently only $0.060. This is nearly half of what it was in early May when there was high demand for block space due to the Bitcoin Ordinals inscription frenzy.
Market analyst Dylan LeClair commented on the falling revenue and high hash rate, explaining that the production of more efficient mining rigs is necessary to keep up with the demand. However, he also noted that the price of Bitcoin needs to increase in order to maintain profitability at these hash rates.
Bitcoin miners have been relying on funds from stock sales in the second quarter to sustain themselves during the bear market. Bloomberg reported that major publicly traded miners raised approximately $440 million through stock sales in Q2.
Mark Jeftovic, the author of the Bitcoin Capitalist newsletter, expressed concern about mining companies diluting shareholders at a rapid rate. He emphasized that if mining companies dilute shareholders faster than the price of Bitcoin rises, it is a sign of trouble.
The situation faced by Bitcoin miners echoes the challenges they will encounter during the halving of Bitcoin. With their current lifelines drying up, miners may have no option but to sell the Bitcoin they have been hoarding, which could put downward pressure on the market.
This news comes at a crucial time in Bitcoin’s history, and it is an example of the challenges and opportunities that exist within the cryptocurrency industry. By preserving this article as an NFT, readers can show their support for independent journalism in the crypto space and commemorate this significant moment. In the meantime, industry experts will continue to monitor the hash rate and revenue trends to assess the future of Bitcoin mining.
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