Bitcoin miners receive just USD 0.10 for every terahash they invest on the network. On June 11th, the hashprice break began, accumulating falls of 23% in a few hours.
The drop in the prices of crypto assets severely hurt the profitability of Bitcoin (BTC) mining. After several days of stability, it lost its resistance and returned to figures not seen since the COVID-19 pandemic began.
According to the analytics firm Hashrate Index, the hashprice is at a daily average of USD 0.10 (10 US cents). That represents a drop of 23 % compared to last week when the indicator was above USD 0.132.
The hashprice is the estimated value a Bitcoin miner receives for each terahash invested on the network. That index correlates positively with the price, shedding light on the profitability of Bitcoin mining. Each new transaction block added to the leading ledger of the network (blockchain) causes the indicator to change.
Bitcoin mining profitability was significantly stable from early May to the first ten days of June. On June 11th, it became evident that a break made the indicator collapse, leading to a crisis in the small-scale mining industry.
The hashprice fell back to just 10 US cents when BTC dropped by 7% from its USD 29,000 barrier to hover around USD 23,700.
The decline in the price of Bitcoin comes amid escalating inflation in the US, which set 40-year records and reached 8.6% in May. The price dropped by 25% over the past week due to the correlation between BTC and the traditional market.
The Participation of Mining Equipment on the Network Continues to Rise
The Bitcoin mining activity remains an important market niche despite its low profitability. Data from Hashrate Index suggests that the mining difficulty and hash rate continue to rise.
Mining difficulty is the mechanism regulating the issuance of Bitcoin, adjusted every 2,016 blocks mined. It increases or decreases depending on the participation of mining equipment on the network. For example, the indicator last rose by 30.28 trillion (T), a figure no higher than its last record. However, it makes it evident that a significant amount of hardware operates in favor of the security and maintenance of the network.
The Bitcoin hash rate or computing power, the existing capacity to process transactions on the network, is 230 EH/s on average. That is close to its last 235 EH/s record and suggests further work in favor of Bitcoin despite the little gains.
The rising participation shows miners know that Bitcoin can appreciate, as operator Fernando Grijalba recently stated.
Hodler sentiment seems to indicate that investors are unwilling to sell their coins. However, miners will have no choice but to show resilience since the bearish market is latent if the trend continues.
Bitcoin is trading at around USD 23,282 and has accumulated a USD 22.2% loss over the last week. While its daily trading volume is above USD 63,80 billion, its market capitalization is about 444,49 billion, according to CoinGecko.
By Alexander Salazar
