December 9, 2022

Mining profitability tends to zero, but miners are increasing production

On October 02, the Bitcoin hashrate reached a record of 272 EH/s. As miners continue to introduce new capacities, the the complexity of mining, which, at a low cost of a coin, leads to a drop in mining profitability. The cost of production is close to the current prices of Bitcoin, but this does not stop the miners.
Mining profitability tends to zero, but miners are increasing production

Image source: btc.com

Income per unit of power is steadily declining, the other day he set a new anti-record of 4.06 BTC per exahash.
Mining profitability tends to zero, but miners are increasing production

Image source: glassnode.com

The trend is caused as an increase in complexity due toa constant influx of miners, and the improvement of equipment. However, the situation has worsened recently. In terms of US dollars, the profitability dipped to the level of October 2020, when Bitcoin was trading at $10,000. That is, in two years, the complexity and hash rate grew by 66%, while the income per hash power was halved.

More clearly, the pain of the miners conveys the assessmentthe cost of mining the coin. So, for the last two years, miners have been working with an increased margin, and now the profitability is close to the cost level. Glassnode used a regression model to evaluate it, obtaining a current cost of $18,300 per Bitcoin.
Mining profitability tends to zero, but miners are increasing production

Image source: glassnode.com

If mining was predominantly engaged incrypto enthusiasts, then in response to a drop in profitability, they would turn off less efficient equipment. This would lead to a drop in hashrate and network complexity, and profitability would grow while maintaining a low cost of Bitcoin.

But public mining companies run the showмногие из которых набрали кредиты в бычий цикл, а теперь вынуждены продавать запасы монет по низким ценам для покрытия расходов. И если в 2021 году большинство из них были просто убыточными, то в текущем году часть из них ожидает процедура банкротства или поглощения.
Mining profitability tends to zero, but miners are increasing production

Image source: arcane.no

Напротив, готовые к турбулентности рынка и сохранившие капитал майнинг-компании сейчас либо покупают конкурентов, либо заказывают асики по сверхнизким ценам. Так, Cleanspark за лето приобрела около 3000 тыс. асиков, а в сентябре сделала заказ еще на 10 тыс. Antminer S19j Pro, назвав текущие рыночные условия «беспрецедентными возможностями».
Mining profitability tends to zero, but miners are increasing production

Image Source: Cryptocurrency Exchange StormGain

The influx of large capital leads to the fact that onone bankrupt company is replaced by two with more efficient equipment. For this reason, complexity is increasingly detached from the value of the coin, and the current crisis has not affected the network hashrate in any way. For Bitcoin, this is good news, because with the growth of computing power, the security and stability of the network increases.

Analytical group StormGain

(platform for trading, exchanging and storing cryptocurrency)