Last April’s halving didn’t help matters for Bitcoin miners, especially the smaller ones. And to top it all off, the price of BTC has still not taken off, despite the optimistic predictions of some analysts. Between falling profitability and rising difficulty, miners find themselves stuck in a market that is increasingly difficult to navigate.
Bitcoin: Profitability in free fall, difficulty on the rise
Bitcoin mining has never been so unprofitable : the miners are at their wit's end. According to JPMorganin August, miners earned on average only $43,600 per exahash per seconda sadly low record.
As a reminder, in November 2021, When Bitcoin peaked at $60,000, that number was $342,000The contrast is as brutal as it is discouraging.
This drop in profitability is explained by a combination of unflattering factors:
- 15% drop of the capitalization of miners listed on the United States Stock Exchange.
- 9% increase of mining difficulty in one month.
This increased difficulty is due to a hashrate that soars, reaching an all-time high despite the challenges: 631 exahashes per second in Augustan increase of 16 EH/s compared to the previous month. The more computing power there is on the network, the more difficult and expensive it becomes for miners to solve blocks, and therefore to generate enough revenue to cover their costs.
The path is therefore increasingly steep for miners, large and small.
Crypto: Volatility and Bear Market, Double Punishment
As if the situation of Bitcoin miners was not enough, theCrypto market volatility has come to play spoilsport. In August, Bitcoin's annualized volatility index rose from 45% to 62%making the ground even more unstable.
In such a context, miners face a double penalty: a continuous decline in the price of BTC for the third consecutive month and unpredictable fluctuations that make any long-term strategy difficult.
Mining stocks also suffered.
Of the 14 U.S. miners tracked by JPMorgan, only three managed to perform better than bitcoin. Even a temporary increase in transaction fees, reaching 120% of the block reward in August, was not enough to turn things around. That’s how tough times are for these essential players in the crypto world.
Despite these obstacles, miners can still hope for a bright future. The “Goldilocks” scenario could offer them welcome stability in a chaotic market.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
