Bitcoin Miners Navigate Post-Halving Challenges Amid Lower Earnings and High Network Hash Rate
Summary:
Miners are facing increasing challenges after the Bitcoin halving event, including a high network hash rate and lower revenues, reducing their overall earnings. The halving cut miners' block rewards, while operational costs remained consistent. However, despite these changes, the total network hash rate has remained stable, suggesting Bitcoin mining remains profitable at current prices. Nonetheless, decisions of miners to remain in the market will likely depend on Bitcoin price fluctuations and the cost of electricity.
Miners are grappling with the aftermath of the unprecedented profits recorded on Bitcoin's (BTC) halving day as they now face a high network hash rate and reduced revenues, which are significantly impacting their earnings. The hash price, or the average income a miner gets per hash execution, has plummeted to its lowest since October 2023. As cited by the crypto analytical platform CryptoQuant, miners saw their hash price dive from nearly $0.12 in the early days of April to just $0.07 after the halving - a drop from the $0.19 peak on the day of halving.
The halving event of Bitcoin brought down miners' block rewards from 6.25 BTC to 3.125 BTC, though their operational expenses have remained consistent. CryptoQuant's CEO, Ki Young Ju, has projected that mining costs with Antminer S19 XPs are likely to double from $40,000 to $80,000 post-halving.
However, Bitcoin's current prices still allow for profitable mining as the total network hash rate has shown no major fluctuation since the halving event. Reports from Cointelegraph Markets Pro reveal that Bitcoin has stayed above the $64,000 mark since April 19.
CryptoQuant's report states that while it might be too premature to predict the halving's long-term impacts, miners appear to be maintaining their operations at pre-halving rates, as the total network hash rate remained steady at 617 EH/s post-halving.
On the day of halving, miners witnessed record-breaking transaction fees as a percentage of total revenue. Peak levels of 75% were seen, amounting to approximately $80 million. These, however, have since reduced to around 35% of total miner revenue.
It's crucial to note that while immediate indicators suggest overall stability, long-term implications on hash rates and mining activities may still fluctuate. Historically, we've seen miners withdraw from the market in post-halving phases due to increased operational costs. Essential factors such as shifts in Bitcoin's value and altering electricity expenses will have a substantial influence on the mining industry.
Published At
4/24/2024 8:33:22 PM
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