Profitability of Bitcoin miners under threat as hash rate hits new all-time high
Analysts say Bitcoin miners' worst days are likely behind them, but the network's soaring hash rate and the rising difficulties are weighing on profit margins.
![Bitcoin miner profitability under threat as hash rate hits new all-time high](https:// images.cointelegraph.com/images/1434_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTAvZGY1ZDQ5MDYtMzI3Zi00YzNlLWE3ZmItOTE3OWMwN2MwYmQzLmpwZw==.jpg)
Bitcoin hash rate hit a new all-time high above 245 exahashes per second on Oct. 3, but at the same time Bitcoin (BTC) miner profitability is near all-time lows .
With prices in the $20,000 range and an estimated network-wide production cost of $12,140, Glassnode's analysis suggests "miners are somewhat on the cusp of acute financial difficulties".
![](https://s3.cointelegraph.com/uploads/2022-10/0cdef2ca-46db-4dd0-8e80-b11178843f74.png)
Generally, difficulty, a measure of how "difficult" it is to mine a block, is a factor in determining the production cost of mining Bitcoin. A higher difficulty means that extra computing power is needed to mine a new block.
Using a difficulty regression model, the data shows an R2 of 0.944, and the last time the model showed signs of miner distress was during the BTC runout at $17,840. Currently, it is hovering around $18,300, which is not far from the price range seen over the past two weeks.
![](https://s3.cointelegraph.com/uploads/2022-10/1a03ea57-5ffe-4298-83bf-51fe987151ef.png)
Hash rate hitting a new all-time high effectively means miner margins will be squeezed even further. Outfits that are not profitable can either trade at a loss, assuming the future price of BTC will eventually make up the cost difference, or they can unplug and wait for difficulty to decrease or energy costs to improve. p>
With the recent increase in hash rate, the difficulty should also increase next week, with estimates pointing to a 6%-10% adjustment.
![](https://s3.cointelegraph.com/uploads/2022-10/16553f6d-c624-4a74-b56a-d603654ae4b5.png)
![Profitability of Bitcoin miners under threat as hash rate hits new all-time high](https://images.cointelegraph.com/images/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTAvZGY1ZDQ5MDYtMzI3Zi00YzNlLWE3ZmItOTE3OWMwN2MwYmQzLmpwZw==.jpg?#)
Analysts say Bitcoin miners' worst days are likely behind them, but the network's soaring hash rate and the rising difficulties are weighing on profit margins.
![Bitcoin miner profitability under threat as hash rate hits new all-time high](https:// images.cointelegraph.com/images/1434_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTAvZGY1ZDQ5MDYtMzI3Zi00YzNlLWE3ZmItOTE3OWMwN2MwYmQzLmpwZw==.jpg)
Bitcoin hash rate hit a new all-time high above 245 exahashes per second on Oct. 3, but at the same time Bitcoin (BTC) miner profitability is near all-time lows .
With prices in the $20,000 range and an estimated network-wide production cost of $12,140, Glassnode's analysis suggests "miners are somewhat on the cusp of acute financial difficulties".
![](https://s3.cointelegraph.com/uploads/2022-10/0cdef2ca-46db-4dd0-8e80-b11178843f74.png)
Generally, difficulty, a measure of how "difficult" it is to mine a block, is a factor in determining the production cost of mining Bitcoin. A higher difficulty means that extra computing power is needed to mine a new block.
Using a difficulty regression model, the data shows an R2 of 0.944, and the last time the model showed signs of miner distress was during the BTC runout at $17,840. Currently, it is hovering around $18,300, which is not far from the price range seen over the past two weeks.
![](https://s3.cointelegraph.com/uploads/2022-10/1a03ea57-5ffe-4298-83bf-51fe987151ef.png)
Hash rate hitting a new all-time high effectively means miner margins will be squeezed even further. Outfits that are not profitable can either trade at a loss, assuming the future price of BTC will eventually make up the cost difference, or they can unplug and wait for difficulty to decrease or energy costs to improve. p>
With the recent increase in hash rate, the difficulty should also increase next week, with estimates pointing to a 6%-10% adjustment.
![](https://s3.cointelegraph.com/uploads/2022-10/16553f6d-c624-4a74-b56a-d603654ae4b5.png)
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