Bitcoin Miners Struggle as Energy Prices Rise and Hash Prices Fall
Bitcoin prices continued to hold near $20,000 last week, but some miners tumble as energy prices spike and all-time lows hash reduces profits.
Even though the price of bitcoin has been falling for quite some time and is down around 56% since the start of the year, the dominoes have just started falling for bitcoin miners. What caused the implosion?
“There are a lot of different issues going on. Obviously, the global recession is looming, in addition to inflation and rising electricity prices,” said Christopher Perceptions, Founder of PerceptForm and CEO of NoCodeClarity (Web3 no-code apps), at TechCrunch.
“Miners are struggling right now for a myriad of reasons,” Nick Hansen, CEO of crypto mining firm Luxor, told TechCrunch. “We are seeing a historically low hash price, which means miner revenue is at an all-time low.”
Hash price is a metric to determine the market value of each unit of hash power, which is set based on changes in the bitcoin mining difficulty (which is currently high) and the price of the bitcoin. cryptocurrency.
Image credits: index of hash
The hash price is near an all-time low, according to data from Hashrate Index, Luxor's Bitcoin mining data analysis. The current hash price is around $70.72, down 80.5% from $361.82 a year earlier.
In addition, energy prices have risen in many markets, meaning miner spending is at record highs, Hansen said.
At a high level, the higher the hash rate, the harder it is to mine bitcoin, which means it takes more electricity to do so, Perceptions said. "If the price of electricity is high, it is more difficult to make a profit."
Bitcoin prices continued to hold near $20,000 last week, but some miners tumble as energy prices spike and all-time lows hash reduces profits.
Even though the price of bitcoin has been falling for quite some time and is down around 56% since the start of the year, the dominoes have just started falling for bitcoin miners. What caused the implosion?
“There are a lot of different issues going on. Obviously, the global recession is looming, in addition to inflation and rising electricity prices,” said Christopher Perceptions, Founder of PerceptForm and CEO of NoCodeClarity (Web3 no-code apps), at TechCrunch.
“Miners are struggling right now for a myriad of reasons,” Nick Hansen, CEO of crypto mining firm Luxor, told TechCrunch. “We are seeing a historically low hash price, which means miner revenue is at an all-time low.”
Hash price is a metric to determine the market value of each unit of hash power, which is set based on changes in the bitcoin mining difficulty (which is currently high) and the price of the bitcoin. cryptocurrency.
Image credits: index of hash
The hash price is near an all-time low, according to data from Hashrate Index, Luxor's Bitcoin mining data analysis. The current hash price is around $70.72, down 80.5% from $361.82 a year earlier.
In addition, energy prices have risen in many markets, meaning miner spending is at record highs, Hansen said.
At a high level, the higher the hash rate, the harder it is to mine bitcoin, which means it takes more electricity to do so, Perceptions said. "If the price of electricity is high, it is more difficult to make a profit."
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