The Bitcoin network is reaching new performance peaks, leading to increased competition for cryptocurrency miners. While this is good news for Bitcoin’s security, for miners it’s a cause for concern.
The Bitcoin network, dubbed the “workhorse” of cryptocurrencies, is continually gaining strength. On October 12th, it reached a record hashrate value of 447 exahashes per second, as reported by Blockchain.com. Another source, Bitinfocharts, reports an even higher value – 481 EH/s. Despite minor differences, both sides agree that this is the highest rate ever.
Hashrate has increased by 77% since the beginning of the year and by 170% from the market peak in November 2021. This means that mining the next block in the chain is now harder than ever before. What’s more, the next difficulty adjustment, due in a few days, may be as high as +7.4%. Difficulty is a measure of competition among miners and currently stands at a record 57.3T.
The consequence of all this is a decline in mining profitability, also called hashprice. Hashprice is the expected value of 1 TH/s of hashing power per day. It has dropped to 0.06 USD per TH/s per day, an 85% decline compared to the market peak of 0.40 USD per TH/s per day.
The current market situation presents a threefold challenge for miners: high hashrate and difficulty indicators, low asset prices, and high energy costs. On top of this, JPMorgan predicts that hashrate indicators will drop by 20% after the next block reward halving, which is expected at the end of April or the beginning of May.
Interestingly, the United States currently holds the largest share of global hashrate, at 40%. Moreover, financial giant BlackRock is investing in several of the largest Bitcoin mining companies – including Riot Platforms, Marathon Digital, and Hut 8.
If Bitcoin prices don’t improve soon, we may witness another wave of miner exits. The upcoming block reward halving, happening in about six months, will further complicate matters as the block reward will be cut in half. Experts predict that BTC prices need to reach around 90 thousand dollars for mining to remain profitable at current rates. dolarów, aby górnictwo było nadal opłacalne przy obecnych wskaźnikach.
Although the price of Bitcoin remains stable at 26,844 dollars, it has lost 4% of its value since last weekend. Strong support at the 26 thousand dollar level may indicate the direction the cryptocurrency is heading in the near future.
Photo by Michael Förtsch on Unsplash
