The world’s largest cryptocurrency Bitcoin (BTC) has been trading in a very narrow range around the $19,200 level in recent weeks. On the other hand, the Bitcoin hash rate continues to increase rapidly. This means that Bitcoin miners have to use more computational power to add new blocks to the Bitcoin Blockchain, but energy costs are also skyrocketing, negatively impacting miners’ income.
Bitcoin Miners in Trouble
The rapid increase in energy costs, such as Bitcoin’s hash rate, has caused the income of miners to drop significantly. This could possibly lead to another major selling pressure from Bitcoin miners as seen at the beginning of the year. On-chain data provider Glassnode’s assessment on the subject is as follows:
Bitcoin Hash Rate Price plunged to an all-time low of $66,500 per Exahash. This means that BTC miners are earning the lowest hashrate they have seen in the past, possibly putting the industry under extremely low income stress.
Arcane Research published a report earlier this month stating that miner revenues dropped by 81 percent after peaking in October of 2021. The report noted that the vast majority of miners had their gross margins down from 80 percent to 90 percent to 30 percent to 40 percent. Arcane Research made the following assessment in its report:
Unfortunately, most miners today are exposed to increasing energy costs to varying degrees. Due to the energy crisis, the mining industry nearly disappeared in Europe, but miners in the US are starting to feel the problem as well. Electricity prices have increased significantly in the United States, where a significant proportion of industrial-scale miners are located, and the fact that natural gas prices continue to rise may cause electricity prices to increase further.