In the last three weeks, revenues from bitcoin mining have grown significantly.
In fact, profitability has more than doubled from $0.17 per THash/s per day on July 27 to over $0.4 in mid-August.
Two factors influenced these increases.
The first is undoubtedly the increase in the price of bitcoin, which has risen by 35% since July 27, given that the premium in BTC for those who manage to mine a block is always the same (6.25 BTC per block).
But the difficulty of the hash mining process has certainly also had an impact, as from July 18, it dropped to its lowest peak of the year and has remained low since then.
However, from July 27, the total hashrate allocated on bitcoin mining has started to grow again, after literally collapsing from almost 200 Ehash/s in mid-May to 70 Ehash/s at the end of June. Excluding this minimum peak at the end of June, until July 27, it had always remained below 110 Ehash/s lately, but starting from the next day, it returned above this threshold, even managing to get back above 130 Ehash/s in the last few days.
Theoretically, an increase in hashrate should cause a reduction in profitability due to increased competition. Still, this increase was far lower in percentage than the increase in bitcoin price, thus acting only marginally.
Bitcoin mining: profitability, revenue and accumulation
In a recent report published by Glassnode, for example, we read that hashrate has increased by about 25% from its lows over the past two months, suggesting that it has come back online with computing power equivalent to about 12.5% of the affected miners.
They further add:
“Bitcoin miner revenue per hash has climbed by 57%, returning to mid-2020 levels as the Great Migration continues. The typical 900 BTC mined per day are distributed between 62.5% of the peak hash-power seen in May.”
Such increases moreover allow miners to reduce the amount of BTC they have to sell to finance their expensive business, which could also have a further beneficial effect on the price of bitcoin itself.
In fact, since July, it seems to have started a new phase of accumulation for miners, who, throughout June, had to liquidate part of the bitcoins accumulated previously to meet all expenses.
“The net growth of miner balances has now hit +5k BTC/month which demonstrates a net reduction in compulsory sell-side pressure sourced from miners.”