Bitcoin hash rate falls as miners shut down unprofitable ASICs after halving.

adminMay 14, 2024

The Bitcoin hash rate fell as Bitcoin mining companies began shutting down unprofitable mining equipment following the fourth Bitcoin halving.

According to data from blockchain.com, the Bitcoin network’s hash rate fell to its lowest level in more than two months, 575EH/s, on May 10, before recovering slightly to the current 586EH/s.

According to post Written by James Butterfill, Head of Research at CoinShares.

The temporary decline was predicted in an April 19 report from CoinShares, which predicted a surge in hashrate next year. according to the report:

“Our model predicts that the hash rate will rise to 700 exahash by 2025, but after halving, the hash rate could fall by up to 10% as miners discontinue unprofitable ASICs.”

According to the report, the temporary decline is due to increased Bitcoin (BTC) mining costs due to the halving, along with rising electricity costs.

“Key mitigation strategies include optimizing energy costs, improving mining efficiency, and securing favorable hardware procurement terms.”

Infrastructure and energy costs remain key to BTC mining profitability.

But according to Nazar Khan, co-founder and COO of TeraWulf, only small-scale mining operations with less energy-efficient equipment will be at risk after the 2024 halving. In an interview with Cointelegraph, Khan said:

“If you’re a company that has a bunch of machines and you’re not profitable, you’re going to be challenged. If a company has high-quality infrastructure that can supply power at low cost, it is a real asset, and the basic value of that asset (BTC) has increased…

TeraWulf is the world’s eighth-largest Bitcoin mining company, valued at more than $670 million, according to Companiesmarketcap, and plans to further expand its mining operations this year despite block rewards being halved.

Related: 10 Days Until Halving: Bitcoin Mining Profitability Not Necessarily Dropping.

However, the profitability of a mining operation largely depends on how much electricity the company pays. According to the May 2 post, two of the older ASIC models, the S19 XP and M50S++, operate at a loss with electricity costs of more than $0.09/kWh (kilowatt-hour). Hash Rate Index.

“S19 XP and M50S++ will operate at a loss if hash costs rise above $0.09/kWh. >$0.08/kWh k Pro and M50S+ are not profitable. And at $0.06-$0.07/kWh, the S19j Pro+, j Pro, and M30S++ will struggle.”