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The computational power of the Bitcoin network continues to rise, which enhances its security but presents challenges for miners who are now contending with unprecedented competition.
On October 12, Bitcoin’s hashrate reached a new high of 447 exahashes per second, as reported by Blockchain.com.
Bitinfocharts provides a slightly elevated average of 481 EH/s, yet both sources concur that this is the highest level recorded for this metric.
Challenges for Miners
Since the start of this year, the hashrate has surged by 77% and has increased by 170% since the peak of the bull market in November 2021. This escalation means that mining the next block on the blockchain has become more challenging than ever.
Additionally, the forthcoming difficulty adjustment in a few days could rise by as much as +7.4%. Difficulty reflects the level of competition among miners and is currently at an unprecedented high of 57.3T.
The overall impact is a reduction in mining profitability, commonly referred to as hashprice. Hashprice, which indicates the anticipated value of 1 TH/s of hashing power per day, has decreased to $0.06 per TH/s per day.
This represents an 85% decline from the bull market peak of $0.40 per TH/s per day as mining profitability diminishes.
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Bitcoin miners are presently facing a trifecta of challenges: elevated hash rates and difficulty, declining asset prices, and rising energy expenses.
Furthermore, JPMorgan has forecasted that hash rates could decline by 20% following the next halving event in late April or early May.
Earlier this week, trader Oliver Velez noted that the United States holds the largest share of the global hashrate at 40%. Additionally, asset management firm BlackRock has invested in several major Bitcoin mining companies, including Riot Platforms, Marathon Digital, Cipher Mining, Hut 8, and Terawulf. It also provided a loan to the bankrupt Bitcoin miner Core Scientific in December.
“It is evident that the U.S. is determined to succeed in the hashrate competition,” he stated.
BTC Price Perspective
If Bitcoin prices do not recover soon, another miner capitulation may occur. The upcoming halving in approximately six months will further complicate matters for miners as the block reward is reduced by half.
It has been suggested that BTC prices would need to reach around $90K for mining to remain viable at current conditions.
However, the market trends are currently moving in the opposite direction. BTC remains stable for the day at $26,844; however, it has experienced a 4% decline since last weekend.
There is strong support at the $26K mark, which may be where it is headed in the near term.
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