Bitcoin Miner Profits Squeezed as Hash Price Hits October 2023 Lows

Miners are facing a new challenge after the halving event, as the high network hash rate and lower revenues are impacting profitability. The hash price, which is the average revenue a miner earns per hash, has reached its lowest level since October 2023. CryptoQuant, a crypto analytics firm, reported that the hash price dropped from around $0.12 in April to $0.07 after the halving, following a peak of $0.19 on halving day.

The bitcoin halving event reduced miners’ block rewards from 6.25 BTC to 3.125 BTC, while operational costs remained unchanged. CryptoQuant’s CEO estimates that mining costs with Antminer S19 XPs will double from $40,000 to $80,000 after the halving. Despite the decrease in rewards, the total network hash rate has remained stable, indicating that mining is still profitable at current bitcoin prices, which have been holding above $64,000 since April 19, according to Markets Pro.

Transaction fees reached record levels relative to total miner revenue on the day of the halving, accounting for 75% of total revenue, or around $80 million. Since then, transaction fees have decreased to approximately 35% of total miner revenue. While the immediate effects have been relatively stable, there could still be long-term impacts on the hash rate and overall miner activity. Past post-halving periods have seen miners exit the market due to high operational costs. Factors such as bitcoin price movements and changes in electricity costs are expected to play significant roles in the mining business.