The Bitcoin mining industry is feeling increasing pressure as a key profitability metric, the hash price, slides toward levels that could push smaller operators offline and put pressure on mining equipment providers and service partners.
The retail price is approaching the risk level
By industry ReportsThe retail price — the expected daily revenue per unit of computing power — is about $42 per PH/s today, down from $62 per PH/s in July.
This decline towards the $40 mark is forcing some smaller, less efficient miners to consider shutting down their rigs. Reports have revealed that when revenues drop this low, operators with weak margins can no longer cover energy and maintenance bills.
Hardware manufacturers and hosting companies are affected. Orders for machines have slowed, and any income is tied to them Bitcoin It lost value after the market decline in October.
Some manufacturers have started mining with their own machines to compensate for weak customer demand. Bitdeer and similar companies have been reported to be expanding self-mining operations to fill gaps in sales.
Hash price drops and approaches a critical level. Source: TheMinerMag
Miners are moving to AI computing
High capital costs and steady hashrate increases are making ASIC farms more difficult to operate, especially after the reward was halved in April 2024 to 3,125 BTC.
In 2009, the block reward was 50 Bitcoin and people could mine using central processing units (CPUs). Today, only specialized hardware makes mining viable for most operators. This shift has prompted some companies to shift capacity to general compute for AI workloads.
Based on reports, big deals are emerging direction TRUE. Cipher Mining signed a $5.5 billion, 15-year deal to provide computing power to Amazon Web Services in October.
IREN later agreed to provide GPU services to Microsoft in a $9.7 billion contract. These moves are aimed at generating steady revenues when Bitcoin mining profits shrink.
The market decline adds to the pressure for miners
Bitcoin’s weak price has exacerbated the problem. The token briefly fell below $100,000, trading as much as 20% below the October 6 high of over $126,000.
Analysts point to heavy selling by long-term holders of the coin: Since late June, net sales from this group have exceeded 1 million Bitcoin, according to Compass Point analyst Ed Engel.
The large liquidation of leveraged positions on October 10 also shook the market and led to support levels near $117,000 and $112,000.
Image: Dragos Condrea / Getty Images
Markus Thelen, founder and CEO of 10X Research, said the market’s failure to reclaim key levels indicates bearish conditions, and his company asserts that Bitcoin may continue to fall before a bottom appears.
His team had previously forecast a drop to $100,000, and now says the buyable bottom could be “a few weeks away.”
Featured image from Pexels, chart from TradingView
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