Bitcoin mining profitability in crisis: hashprice at lows of $0.10

graph shows decrease in hashprice in bitcoin mining

Key facts:
  • Just $0.10 is what Bitcoin miners receive for every terahash invested in the network.

  • On June 11, the hashprice break began, which accumulates falls of 23% in a few hours.

The fall in prices of the cryptocurrency market severely impacted the profitability of bitcoin (BTC) mining, which after several days of stability lost its resistance and returned to figures not seen since May 2020, when the COVID-19 pandemic began.

According to graphics Offered by Hashrate Index, the analytical firm of Bitcoin Luxor mining pool, the hashprice is at a daily average of USD 0.10 (10 cents) as of June 13, 2022a fall of 23% compared to what was reported a week ago, when the indicator was above USD 0.132.

The hashprice is the estimated value to be received by a Bitcoin miner for each terahash invested in the network. It is an index that is positively correlated with the price of the currency and that sheds light on the profitability of Bitcoin mining. This indicator changes depending on each new block of transactions added to the great ledger (blockchain) of the network.

As can be seen in the following graph, profitability was fairly stable from the end of May and the first 10 days of June. It was from June 11 when a break began to be evident that made the indicator collapse, enough to generate crisis in the small-scale mining industry.

graph shows decrease in hashprice in bitcoin mining
The hashprice, an indicator of the profitability of Bitcoin mining, is at a low of
10 cents. Font: Hashrate Index.

The hashprice falls to just 10 cents on the dollar just as BTC fell 7% from its $29,000 barrier, to be around USD 23,700, following the prices of the CriptoNoticias Calculator.

As we reported this Monday, the bitcoin pullback occurs amid escalating inflation in the US, whose indicator set records for 40 years and reached 8.6% in May. That caused a 25% drop in price over the past week, due to the correlation between the coin and the traditional market.

Participation continues to rise

Despite the low profitability in mining, the activity remains an important market niche. This is because Bitcoin mining difficulty and hashrate keep risingas Hashrate Index’s own data suggests.

The difficulty, which is the mechanism that regulates the issuance of bitcoins, is adjusted every time 2,016 blocks are mined. It increases or decreases depending on the participation of mining equipment in the network. In the last adjustment, the indicator rose by 30.28 trillion (T)a figure that, although it is not higher than its last record, does show that there is a significant amount of hardware operating in favor of network security and maintenance.

comparison between hashrate graphs and the difficulty of bitcoin mining
The hashrate and difficulty of mining are on the rise. Both indicators allow to have lights
about participation. Font: Hashrate Index.

The hash rate, which is the sum of the computing power of Bitcoin and which translates as the capacity that exists to process transactions on the network, is on average 230 EH/s. This is very close to his last record of 235 EH/s, and it also allows us to suggest that, although little is gained, much is still being done in favor of Bitcoin.

That the participation is on the rise shows that the miners know that bitcoin “can be revalued”, as the operator Fernando Grijalba told CriptoNoticias in recent days.

The hodler sentiment, which we have discussed extensively in this paper, seems to be stronger than ever. However, if the trend continues, the miners will have no choice but to show the resilience that characterizes them, well the bear market is latent.

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