Bitcoin miners are going through a very tough time right now. While the profitability of the activity is in free fall, the hashrate of the bitcoin network exceeds 414 PE/s. This is the first time since the fall of FTX in November 2022 that revenues from bitcoin mining have reached such a low. At the time, the price of BTC hit the bottom of the market cycle by hitting around $16,500. Currently, several mining companies are getting into debt or diluting their capital, trying somehow to survive.
• Bitcoin mining revenue plummeting, hashrate hits new high.
• Major mining companies have sold their shares in order to keep their BTC.
• The halving approach raises concerns about the indebtedness and capital dilution of mining companies.
Bitcoin mining revenues down 50% before the halving!
According to HashPriceIndex, BTC miners will now have to settle for an income of $0.060 per TH/s per day, while they earned twice as much in early May. This was when there was a high demand for Bitcoin Ordinals followed by a high demand for space on the blockchain.
What makes this sharp drop in mining revenue deadly is that it comes at a time when the level of the network’s hashrate is skyrocketing. Since August 18, the hashrate exceeded 414 Exahashes per second, an increase of 54% from the level at the start of 2023. It is also an increase of 80% from the hashrate of the previous twelve months. For minors, it is a tough test.
Will BTC mining companies have to sell off their BTC?
On August 24, Bloomberg reported that the 12 largest listed mining companies had to sell their shares in the second quarter to not sell the BTC they had accumulated. The total amount raised was nearly $440 million.
Mark Jeftovic, editor-in-chief of a crypto magazine, meanwhile warned of the consequences of BTC mining companies resorting to leverage and diluting capital “at an excessive rate”. He warns that a dilution faster than the rate of increase in the price of BTC could lead to serious consequences for these companies.
This situation really calls out when you know that the BTC halving is not very far away and that it will be followed by an increase in the mining difficulty rate and a reduction in the reward. It is therefore to be hoped that the market will recover between now and then. In the meantime, stablecoins can rejoice.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
