Bitcoin’s hash price which is revenue generated by miners on a per tera-hash basis has reached an all-time-low of $66,500k per exahash, as per data provided by Glassnode.
Hashrate Index’s most recent Q3 mining report has identified a number of factors that have contributed to a drastically lower hash price and greater cost to create 1 BTC. Changes in mining difficulty and the price of Bitcoin have an impact on this.
According to the Index, the American summer’s heat waves caused a decline in hash rate, which coincided with a minor rebound in the value of BTC. This provided some relief for the asset’s hash price in the middle of Q3.
But in September, when hash rates reached new all-time highs and the price of Bitcoin fell below $20k once more, the hash price began to approach record lows.
On the other hand, rising energy prices in North America and Europe further posed a threat to mining companies’ profit margins.
A “combination of mismanaged renewable energy policies, underinvestment in oil and gas, nuclear plant decommissionings, and Russia’s war with Ukraine,” which have driven up energy prices, have been particularly onerous on the latter.
Due to the decline in hash price, several miners using mid-range equipment struggled to meet ends. In the past, retail miners have either sold or abandoned rigs that could no longer be mined profitably.
Bitcoin Mining Becoming Too Expensive?
Some mining firms using mid-range equipment are having trouble making breakeven cost margins as hash prices have fallen. When rigs stopped being profitable to mine, retail miners resort to either sell or abandoned them.
Hashrate Index also issued a warning, stating that the third quarter might be a sign of things to come for the mining sector, including additional bankruptcies, distressed asset sales, and miner capitulation as the year comes to an end.
Co-founder of 21stParadigm and a senior analyst at UTXO Management, Dylan LeClair also pointed out that the hash price, or miner revenue per TeraHash, had just eclipsed the 2020 record low. The price slide has only just started, according to history and prior bad markets, he said.
At the time of publication, Bitcoin price hovered around $19,400, rising by 1.40% in last 24 hours.