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The Bitcoin network’s hashrate has decreased by 12% over the past few months, reaching 970 EH/s. Experts from the CryptoQuant platform have identified the primary factors affecting miners’ operations.
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According to the analysts, the main reasons for the hashrate decline include a sharp drop in earnings from mining the leading cryptocurrency and the shift of some mining companies towards providing resources for artificial intelligence needs.
Amid the falling price of the leading cryptocurrency, daily revenue from BTC mining plummeted from $45 million to an annual low of $28 million in a short span. The figure later partially recovered to approximately $34 million; however, this was insufficient to stabilize the situation.
CryptoQuant believes that the decline in earnings was driven by a reduction in block production, coupled with a deteriorating price environment, which further impacted miners’ economics. Consequently, the profitability of mining has significantly decreased.
Analysts indicate that the current conditions—a combination of high network difficulty and insufficiently high prices—render miners particularly vulnerable. Under these circumstances, many market participants are compelled to operate at the brink of profitability, which exerts additional pressure on Bitcoin’s network metrics.
Previously, specialists from the American banking holding JPMorgan stated that the Bitcoin mining industry is undergoing a cleansing phase: weaker players lacking access to inexpensive electricity are exiting the market, while larger companies are increasing their presence.
