Nikolas Sargeant
According to data from blockchain.com, the hash rate plunged to its lowest point in over two months, hitting 575 exahash per second (EH/s) on May 10. Although there has been a slight uptick since then, it currently hovers around 586 EH/s.
The drop in hash rate can be ascribed to miners powering down rigs that are no longer economically viable, as James Butterfill, the head of research at CoinShares, pointed out in a recent post on X.
Bitcoin Hash Rate to Surge Again
The escalated costs of Bitcoin mining following the halving, alongside the upward trajectory of electricity expenses, are cited as the primary drivers behind the hash rate reduction.
The report puts forward several strategies for mitigation, including the optimization of energy expenditure, enhancement of mining efficiency, and securing advantageous hardware procurement terms.
Nazar Khan, co-founder and COO of TeraWulf, is of the opinion that only smaller mining setups with less energy-efficient equipment will encounter hurdles post the 2024 halving.
Despite the diminished block rewards, TeraWulf, valued at over $670 million and one of the globe's largest Bitcoin mining firms, intends to broaden its operations.
Nonetheless, the profitability of mining endeavors is heavily contingent on electricity costs. According to the Hashrate index, older ASIC models like the S19 XP and M50S++ incur losses when electricity costs exceed $0.09/kWh.
At $0.08/kWh or beyond, the Pros and M50S+ models become unprofitable. Even the S19j Pro+, j Pros, and M30S++ models will face challenges with electricity costs ranging between $0.06 and $0.07/kWh.
As mining entities adapt to the shifting landscape, optimizing energy efficiency and curtailing operational expenses will be pivotal in sustaining profitability in the Bitcoin mining sector.
Bitcoin Miners Adjust Operations After Halving
Bitcoin miners, including Riot Platforms, have been recalibrating their operations subsequent to the halving event on April 20, which slashed mining rewards from 6.25 BTC to 3.125 BTC, approximately $180,600 presently.
There are indications of a significant outflow of Bitcoin from miners in the months following the impending halving event. In a recent analysis, Markus Thielen, head of research at 10x Research, estimated that Bitcoin miners could liquidate around $5 billion worth of BTC post-halving.
CoinShares' analysis suggests that Riot, TeraWulf, and CleanSpark are among the best-positioned companies to weather the impending turbulence.
It's noteworthy that the number of new Runes etched on Bitcoin daily has undergone a drastic decline, falling below 250 for the past six days. Initially, the protocol offered a much-needed revenue boost for Bitcoin miners seeking to offset the impact of the recent halving.
