The largest cryptocurrency by market value has dropped almost 60% this year to around $19,000. This year’s extended slide in Bitcoin’s price and persistent high energy prices have also eroded the formally industry profit margins, which were once on par with luxury goods makers. “With all costs taken into account, only the miners with extremely low electricity prices are running at a profit right now.” said Jarand Mellerud, mining analyst at digital asset research firm Arcane Crypto. While mining companies raised billions of dollars in building out mining infrastructure and deploying rigs during the bull run last year, the computing power only started ramping up this year. Mining difficulty, a measure of Bitcoin miners’ computing power for the entire network, is flirting with a record high after its latest bi-weekly adjustment last week. However, such rewards are limited and the more competition there is on the network, the less rewards each miner will receive. The index uses multiple factors, such as the price of Bitcoin and transaction fees, to calculate the miners’ total revenue.īitcoin miners use powerful computers to compete to be the first one that comes up with a solution to validate transactions encrypted by the Bitcoin network and win a reward in the form of newly minted tokens. It last neared that level during the crypto market crash in June, when some miners had to sell coins held as investments to cover costs.
The hash price index, which indicates the mining revenue value per unit of computing power, dropped to around 7.7 cents for each terahash, the lowest since September 2020, according to data from crypto-mining services company Luxor Technologies. (Bloomberg) - A closely-watched measure of Bitcoin mining revenue has dropped to the lowest in about two years as competition increases while prices drop and energy costs soar.
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