Why Bitcoin Miner Earnings Are the Biggest Loser in the Bear Market
Data shows Bitcoin miner earnings have fallen by around 81% since peaking in October, here’s why.
Bitcoin Miner Earnings Have Lost Big During Bear Market
According to the latest weekly report from Arcane Research, the BTC miners hash price is now only down to $0.077 per TH/s.
The relevant indicator here is “hashrate”, which is a measure of the total amount of computing power connected to the Bitcoin network.
The metric’s value is calculated in TH/s (terahash per second), which indicates the rate at which miners can perform new hashes on the blockchain.
The daily revenue that these chain validators earn per TH/s of their hashrate is called “hashprice”. Here is a chart showing the trend in this indicator over the last couple of years:
Looks like the value of the metric has been going down over the last year | Source: Arcane Research's The Weekly Update - Week 39, 2022
As you can see in the graph above, the Bitcoin mining hash price has seen a sharp decline over the past twelve months.
The indicator’s value has declined from $0.422 during the peak in October, to just $0.077 today. This makes it a decrease of 81% in this period.
In comparison, the BTC price has decreased by 60-70% in the same time period, a huge decrease, but still better than the miners’ earnings.
There are mainly two reasons why the Bitcoin mining hash price has suffered so badly in this bear market.
The first and the more obvious is the falling price of the crypto. Since miners pay all operating costs like utility bills in fiat, the USD value of their earnings is more relevant to them, which is why the hash price is also in dollars.
Bitcoin’s value plummeting during the bear market has naturally led to the hashish price also taking a big hit.
The second reason is the ever-increasing hash rate. A feature of the BTC network is the “mining difficulty”, which tries to ensure that no matter how many miners or how much power comes online on the chain, blocks will still only be hashed at a constant rate.
This means that when the hashrate goes up, the network counters it by increasing the mining difficulty. Even though there are more TH/s attached to the chain, the total revenue still remains the same, meaning that the revenue per TH/s actually goes down.
BTC price
At the time of writing, Bitcoin’s price is hovering around $19.8k, up 4% in the last week.
The BTC value seems to have risen over the last two days | Source: BTCUSD on TradingView
Featured image from Brian Wangenheim on Unsplash.com, charts from TradingView.com, Arcane Research
