A bearish market, electricity costs, and other struggles with the supply could minimize the hash rate. They expect that the Bitcoin hash rate will reach new highs of 280 EH/s by January 2023.

A couple of months ago, people used to think that by the end of the year the Bitcoin (BTC) hash rate would surpass 320 EH/s due to the high participation of miners in the platform. But the bear market changed everything again with the rise in energy costs and flaws regarding the supply chains, situations that forced the projections to suffer a new cycle of corrections.

According to Hashrate Index, a Bitcoin mining analytics firm, the milestone of computing power greater than 300 EH/s looks further away every day. Mining income margins get weaker and weaker, and bitcoin price crumbles down to the $30,000 range.

The firm also highlights that after approaching the historical maximum of 229 EH/s a few days ago, the Bitcoin hash rate crumbled at least 10% to return to 207 EH/s in a weekly moving standard. According to experts, this situation happened even though, so far in 2022, the hash rate reached a peak registered at 19%.

Hashrate Index representatives indicated that the hash price is also falling. This figure is the amount miners receive for each tera hash introduced in the network. It crashed by 50% in 2022 to return to 2020 levels due to the pandemic.

The group also opened up about the difficulty of mining, which reached stages never experienced before. This situation could slow down the expansion of transaction processing power on the Bitcoin platform, according to Hashrate Index experts.

About the Damage the Miners Cause

The firm sustained that the increase in gas prices, renewable energy, and the dismantling of the minimum energy demand caused a rise in the electricity markets of the United States of America and the European region, to the damage of mining activity, which exists focused on electrical energy consumption.

While they maintain that Bitcoin miners can work under the energy crisis, there are others who “are at risk of going under as the hash price continues to crash down.”

Regarding supply chains, they highlighted that these are still recovering from the harmful impact of COVID-19 on logistics and supply/demand.

The Most Prominent Mining Entities will not Grow, and the ROI will Lengthen

Hashrate Index points out that the large mining companies will not experience growth so fast this year because of this particular situation. In addition, they suggested that the return on investment (ROI) could double for miners whose activities started last year. If the ROI had a launch schedule planned for 2022 or 2023, it would now get postponed to 2024 or 2025.

According to the firm, this results from carrying out deals using 2021 profitability, 2021 interest rates, and 2021 ROI models.

Specialists highlighted that the increase in interest rates in the United States of America, registered at 1%, makes it harder for miners to support their ASICs or systems the same way they did the last year.

By: Jenson Nuñez

The government introduces a bill to increase electricity fees for Bitcoin miners operating in the country. Disconnecting most mining companies from the electrical system has prevented them from receiving most of the expected amount.

Kazakh may have earned over USD 1.5 million from Bitcoin (BTC) mining in the first quarter of 2022. However, they stopped receiving the funds as they restricted the activity.

The Kazakh government stated that Bitcoin mining would have added 652 million tenges (KZT) to the state budget. That amount of money is equivalent to just over one and a half million US dollars.

They said that energy payment would have allowed the money to reach the state coffers. They explained that electricity is the primary fuel for the mining equipment to conduct their operations.

The government specified that 12 regions of the Asian country would have contributed to the payment for Bitcoin mining. They would have made the above amount of money accessible to the State.

The Kazakh Government Has No Access to the Money Left by Miners

Miners left a significant amount of money, but the Kazakh government does not have full access to it due to restrictions against the activity. It seems that they missed the opportunity of profiting from Bitcoin mining.

The government highlighted that they had disconnected most mining companies from the electrical system to guarantee energy security. That has happened since October 2021, so the state budget has not received most of the expected amount.

In March, the government dismantled nearly 100 allegedly clandestine Bitcoin mining farms to minimize the energy crisis.

They also said leading miners chose to disconnect their equipment and leave Kazakhstan amid increased regulations and state surveillance. In addition, they pointed out that political instability directly affected the global hash rate of the Bitcoin network.

The Government Discusses a Bill to Raise Electricity Fees

The government noted that they are discussing a bill before the Parliament of the Republic of Kazakhstan. The draft law establishes an increase in the fee imposed on Bitcoin miners, which could hinder the development of the activity.

Electricity for miners costs KZT 1 (equivalent to USD 0.0023) for each kWh consumed by a farm, according to the government of Kazakhstan.

A raise in the electricity rate would affect the operators since that would add to the low profitability of Bitcoin mining. The activity has been in the red for weeks and at unseen levels since 2020.

The Increase in Electricity Rates Impacts their Hash Rate

Kazakhstan has welcomed many miners fleeing China after the ban on the activity, but they sought to counteract the trend. As a first containment measure, they decided to apply an increase in electricity rates.

For that reason, Kazakhstan went to third place after being the country with the second-highest enabled hash rate.

The Asian country is home to 13.22% of the global hash rate, a drop of 5% since the migration of Chinese miners began in September. According to Cambridge University, they remain a leading mining country, although they are now behind the United States (37.84%) and China (21.11%).

However, the more restrictions the Kazakh government imposes, the less likely they will see the funds left by the mining industry.

By Alexander Salazar