Not Just Bitcoin Price: Factors Affecting BTC Miner Profitability

As many crypto holders brace for a bear market, what are the factors influencing mining activity?

The current cryptocurrency bear market has triggered a massive decline in Bitcoin (BTC) mining profitability, with BTC mining spending outpacing the price of Bitcoin.

Closely tied to the decline in the price of BTC, Bitcoin mining profitability has fallen since late 2021 and hit multi-month lows in early July 2022.

According to data from cryptocurrency tracking website Bitinfocharts, the profitability of BTC mining dropped to $0.07 per day for 1 terahash per second (THash/s) on July 1, 2022, reaching its lowest level. low since October 2020.

The Decline of BTC mining profitability has caused great changes in the crypto mining industry.

Dropping Bitcoin prices fueled selling pressure as miners were pressured to sell their BTC to continue mining and pay for electricity. The majority of major crypto mining companies like Core Scientific have had to sell a significant amount of Bitcoin in order to survive the tough market conditions.

The growing unprofitability of BTC mining has also triggered a sharp drop in demand for crypto mining devices, forcing many miners to sell their mining hardware at a discount.

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