- A fall in electricity prices can lead to lower BTC mining costs for miners.
- However, the BTC hashrate dropped significantly from April 18.
Bitcoin [BTC] mining has had its fair share of challenges in recent times. Operating costs are the biggest challenges, especially with rising energy prices due to high winter demand.
So, how is the Bitcoin mining industry doing?
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Electricity prices are expected to fall due to lower demand as Europe and the US exit winter. Most miners are concentrated in these regions and a decrease in electricity demand can translate into lower operating costs for miners.
In addition, the World Economic Forum (WEF) recently touted Bitcoin mining as one of the ways to reduce emissions.
₿𝗥𝗘𝗔𝗞𝗜𝗡𝗚: World Economic Forum says #bitcoin mining can reduce a “massive amount of emissions” and benefit the environment.pic.twitter.com/QF53CcAO9K
— Documenting ₿itcoin 📄 (@DocumentingBTC) April 23, 2023
The WEF is reportedly in favor of Bitcoin mining because modular mining operations can be powered using electricity harnessed through methane. While this is good news, miners may not be out of the woods. This was due to the last difficulty adjustment. Some effects of this adjustment may already be visible.
Tech giant Intel recently announced that it will no longer produce Blockscale ASICs. The timing of the announcement corresponds to the difficulty adjustment. This may indicate that the higher difficulty may have affected the profitability of the Blockscale ASICs.
It has been speculated that the higher difficulty may have been the reason for Intel’s decision.
Assessment of the impact of the higher Bitcoin mining difficulty
Some Bitcoin stats pointed to a clear short-term impact from the recent difficulty adjustment. A good example is the drop in Bitcoin’s hash rate, which has fallen by a notable margin since April 18.
Source: Glassnode
One of the most likely reasons for the drop in hash rate could be that many miners chose to shut down their activities. Such a reaction is common, especially when some Bitcoin miners fail to break even.
They are forced to stop their activities instead of continuing their activities while incurring losses. As a result, miners exiting the market can lead to a drop in hash rate.
How much are 1,10,100 BTC worth today
Bitcoin miner earnings have had their fair share of ups and downs over the past 30 days. However, it fell on April 18, as did the hash rate, indicating it may have been affected by the difficulty adjustment.
Source: Glassnode
Miner earnings should theoretically bounce back once the market has made its adjustments with the remaining miners. Also, the miner’s earnings are determined by more factors than difficulty. The bearish market conditions and lower trading activity/trades likely contributed to lower earnings.
