Despite the fact that Bitcoin’s fourth “halving” event occurred over two months ago, its impact is still affecting Bitcoin miners, making the industry more profitable than ever before.
According to the hash rate index, Bitcoin’s “hash price” hit a historic low on May 1, dropping to $44.76 per day per PB hash. This index quantifies how much money miners can expect to earn per day at a specific hash rate.
The Bitcoin “hash rate” refers to the rate at which Bitcoin miners can make guesses to solve the mathematical problems required to mine Bitcoin blocks and receive newly minted BTC as a reward. 1 PB hash equals 1 trillion hashes.
Participation in this game requires specialized, energy-consuming computer equipment and affordable electricity to sustain their operation. With intensifying global competition, individual miners are experiencing decreasing profitability, with all companies except the most efficient ones falling into net losses.
On the day before the halving, on April 19, Bitcoin’s daily hash price was $92.20. Subsequently, by April 25, fee income sharply declined to $57.53.
Since then, the hash price has mostly moved in tandem with the price of Bitcoin. As BTC drops again this month, mining companies’ profitability is nearing the low point seen in early May, with a daily price of $48.29.
The lack of profitability is evidently impacting the behavior of Bitcoin miners. The total hash rate for Bitcoin has now dropped 13% from its post-halving peak, falling to 564 EB hashes per second (EH/s), indicating that many miners are taking their unprofitable machines offline.
Analysis from CryptoQuant also shows that miners have been selling more BTC to exchanges this month, suggesting that they may need extra cash to cover costs. For example, as of June 10, Marathon Digital sold 1400 BTC in June, compared to only 390 BTC in the entire month of May.
However, miner stocks overall seem unaffected. While performance varies among companies, Valkyrie Bitcoin Miners ETF (WGMI), which provides exposure to the Bitcoin mining industry, rose by 25% last month, reaching a high for 2024 in June. In contrast, Bitcoin dropped by 11%, and prominent Bitcoin investor MicroStrategy (MSTR) fell by 13%.
Edited by Ryan Ozawa