Overview:
Bitcoin mining difficulty rose 3.6% on Wednesday to a new all-time high, which is closely related to the recent record hash rate levels. As miners around the world devote more and more computing power to compete for new blocks, market dynamics have become more complicated, especially in the context of the Bitcoin block reward halving and the newly released CPI index.
Hash rate surge:
The total computing power used by Bitcoin miners, or hash rate, has reached an all-time high of 694 EH/s. This shows that miners are investing unprecedented computing power to compete for new blocks. However, this competition also brings huge energy consumption and operating costs, especially against the backdrop of volatile global energy prices.
Miners’ income has fallen:
Since the Bitcoin halving event, miners’ income has dropped sharply. Before the halving, the average miner income in the seven days was $72.4 million, but now it has dropped to the $25-30 million range. This sharp drop in income has made it difficult for many miners to maintain profitability, especially those small miners with older equipment and lower operating efficiency.
Hash price drops:
The hash price (profit per TH of computing power) has also hit a record low, currently at just $0.04. This means that miners can only earn $0.04 per TH per day, instead of being charged in units of Bitcoin. In this situation, only miners with efficient equipment and low energy costs can remain profitable. This market environment has forced many miners to merge or exit, especially in areas with high energy costs.
Market Integration:
As hash rates continue to climb, inefficient players in the market are being eliminated, while larger miners or operators with cost advantages are becoming dominant. This has led to an increase in mining mergers and acquisitions, and many mining companies have begun to provide other services such as cloud computing in order to diversify their risks. Recently, Swan announced the end of its mining operations and canceled its IPO plans, further proving this trend.
Impact of CPI index:
The latest CPI index shows that inflationary pressure still exists, which has also had an indirect impact on the Bitcoin market. Rising inflation has led to high energy prices, further squeezing miners' profit margins. Although Bitcoin prices have rebounded recently, higher mining costs and lower hash prices still make miners face difficult choices.
Summary and Outlook:
As Bitcoin mining difficulty and hash rate both rise, weak players in the market will be forced to exit, while miners with access to more efficient hardware and low-cost energy will continue to survive. It is expected that consolidation in the mining sector will intensify further in the future, while Bitcoin price fluctuations, changes in energy prices, and inflationary pressures in the global economy will continue to have a significant impact on miners' profitability.
