Bitcoin mining profits hit new all-time lows: difficulty on the rise and mining pools under pressure.
The Bitcoin mining industry is facing a challenging period following the halving in April: on August 5th, miner profitability reached a new all-time low, according to Hashrate Index data. The hash price, an indicator that measures mining profit margins, dropped below $36 per petahash per second (PH/s), a level never seen before. However, in recent days, profitability has been slowly recovering, thanks in part to the rebound in Bitcoin’s price.
Mining companies’ strategies
With the decline in hash price, daily revenues for mining companies have also decreased, dropping from $40 million on July 29th to around $24 million on August 7th.
For large publicly traded companies like Marathon, CleanSpark, Core Scientific, and Riot Platforms, such a low hash price poses a threat to their profitability, with mining costs currently exceeding $60,000 per bitcoin. On August 7th, the average production cost was approximately $83,600.
To protect themselves from the decline in hash price, industry operators have implemented various strategies: in July, Marathon and Riot Platforms decided to hold onto their bitcoin reserves, hoping for a future price appreciation. In contrast, Core Scientific adopted an opposite strategy, liquidating 100% of the mined bitcoins to cover its operational costs.
Mining company CleanSpark, on the other hand, revealed that it sold only 2.54 BTC out of the 494 it mined in July.
Difficulty at all-time highs
On August 1st, the mining difficulty reached a new all-time high of 90.6 trillion. With the upcoming adjustment expected on August 14th, the difficulty is projected to decrease by about 5%.
To keep their operations active and aim for future growth, miners must adapt to the new market conditions post-halving.
