When miners turn off unprofitable ASICs after noon, the Bitcoin hash rate slows down

Bitcoin's hash rate has slowed as Bitcoin mining companies began to eliminate unprofitable miners after the fourth bitcoin halving.

According to data from Blockchain.com, the Bitcoin network's hash rate dropped to a more than two-month low of 575 exahash per second (EH/s) on May 10.

The decrease in hash speed can be attributed to the fact that “miners are starting to turn off unprofitable devices,” according to CoinShares Head of Research James Butterfill's May 13 X post.

A temporary decline was predicted by a CoinShares report on April 19, which is expected to increase hashrate next year. According to the report:

“Our model predicts that it will grow to 700 exahash by 2025, although after a reduction, it could decrease by up to 10% as miners destroy unprofitable ASICs.”

The temporary decrease was due to the halving of Bitcoin (BTC) mining and the increase in electricity costs, according to the report.

“Key mitigation strategies include optimizing energy costs, increasing mining efficiency and securing favorable hardware procurement terms.”

Infrastructure and energy costs remain key to BTC mining profitability.

However, according to Terawolf co-founder and COO Nazar Khan, only small-scale mining operations with less energy-efficient equipment will be at risk after the 2024 halving. In an interview with Cointelegraph, Khan said:

“If you're a company with a bunch of machines, you're going to be challenged if you're not profitable. If you're a company that owns quality infrastructure that can provide low-cost power, that's a real asset, and there's fundamental value to that asset. [BTC] added…”

TeraWulf is the world's eighth-largest Bitcoin mining company, valued at more than $670 million, according to Companiesmarketcap, and plans to further expand its mining operations this year, even though its rewards have halved.

RELATED: 10 Days Until Halving: Bitcoin Mining Profitability Won't Necessarily Fall

However, the profitability of mining operations largely depends on the cost of electricity paid by the companies. The older ASIC models, the S19 XP and M50S++, operate at a loss of more than $0.09/kWh (kilowatt-hour) based on the May 2 X Hashrate Index.

“S19 XP and M50S++ operate at a loss if the hash rate is >$0.09/kWh. >$0.08/kWh k Pros & M50S+ will not be profitable. And at $0.06-$0.07/kWh the S19j Pro+, j Pros and M30S++ struggle.

Related: Runes Are Offering a Significant Lifeline to Bitcoin Miners – TeraWulf COO