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Although the Bitcoin network's fourth ‘halving' event occurred two months ago, the fallout continues to affect Bitcoin miners, making the industry's profits tighter than ever.
According to the Hashrate Index, Bitcoin's “hash price” hit an all-time low on May 1, falling to just $44.76 per petahash/second (PH/s) for the day. The metric shows how much money a miner can earn each day at a given hash rate.
Bitcoin “hash rate” is the rate at which Bitcoin miners generate guesses to solve the mathematical problems required to mine a Bitcoin block and receive newly minted BTC as a reward. One petahash is equal to one quadrillion hashes.
Participating in that game requires specialized and power-hungry computing devices with affordable electricity to keep them running. As global competition increases over time, profits for individual miners decrease, pushing the most efficient companies into net loss.
The day before the decline, on April 19, Bitcoin's daily hash rate was $92.20. What immediately followed — excluding a short-term increase in runes-led earnings — was a higher drop to $57.53 on April 25.
Since then, the price of Hash has mostly risen and fallen with the price of Bitcoin. As BTC has been declining this month, mining profitability is nearing its all-time low of $48.29 daily hash rate in early May.
The lack of profitability is clearly affecting the behavior of Bitcoin miners. The total Bitcoin hashrate is now down 13% from its peak in the previous halving to just 564 exahashes (one quintillion hashes) per second (EH/s)—indicating that many miners are taking their unprofitable machines offline.
CryptoQuant's analysis shows that miners are raising more BTC to exchanges this month, suggesting they may need more funds to cover their expenses. For example, Marathon Digital sold 1,400 BTC from June until June 10, compared to only 390 BTC in the entire month of May.
Still, miners generally don't seem to suffer. The Valkyrie Bitcoin Miners ETF ( WGMI ), which provides exposure to the Bitcoin mining industry, rose 25 percent last month, reaching a June 2024 high, although performance varied from company to company. In comparison, Bitcoin is down 11%, and the large-time Bitcoin Investor Micro Strategy (MSTR) is down 13%.
Edited by Ryan Ozawa.
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