• Bitcoin network hash rate has reached a new peak of 414 EH/s.
• Revenue for Bitcoin miners, or “hash price”, has dropped to levels not seen since the collapse of FTX in November 2022.
• Miners have been relying on funds from stock sales and debt to stay afloat during the bear market.
Bitcoin Network Hash Rate Reaches All-Time High
The Bitcoin network hash rate has recently topped 414 exahashes per second (EH/s) on Aug. 18, marking a new peak for the metric and representing an increase of 54% from what it was at the beginning of 2023 and 80% over the past 12 months, according to Blockchain.com.
Mining Profitability Plunges
Despite this, mining profitability is at record lows as revenue or “hash price” — a measure of dollars earned per TH/s per day — has slumped to levels not seen since the collapse of FTX in November 2022. According to HashPriceIndex, revenue is just $0.060 per terahash per second per day, around half of what it was in early May when demand for block space increased due to the Bitcoin Ordinals inscription frenzy.
Miners Rely on Stock Sales & Debt
To stay afloat during this bear market period, miners have reportedly been relying on funds from stock sales and debt in Q2 2021. Bloomberg reported that 12 major publicly traded miners raised about $440 million through stock sales during this time frame. However, analyst Mark Jeftovic noted that some mining companies are diluting shareholders at an excessive rate which could be detrimental if prices do not adjust upwards fast enough to keep mining profitable with such high hash rates.
Price Needs To Increase To Keep Mining Profitable
Market analyst Dylan LeClair commented on these developments saying that more efficient rigs will continue being produced but “it’s almost time for the price to outpace” meaning that prices need to adjust upwards significantly in order for miners to remain profitable at current hash rates.
The recent spike in Bitcoin network hash rate indicates strong security measures but revenue for miners has taken a severe hit due primarily to low prices which need to increase significantly if they wish to remain profitable with such high hash rates