Bitcoin miners are experiencing a sharp decline in profitability, with daily revenues dropping from $78 million before the halving event to just $26 million currently. According to reports, this significant reduction in income comes despite the major decrease in Bitcoin mining difficulty, which fell by 7.8% on June 5.
Largest Difficulty Drop Experienced Since 2022
The current levels of challenge are extraordinary, not witnessed since prior to the halving event in April. Reports indicate that the mining difficulty of Bitcoin decreased from 83.6 terahash per second (TH/s) to 79.50 TH/s on June 5, reaching levels observed previously in March. The recent reduction in mining difficulty is significant as it represents the most substantial decline since the downfall of the crypto exchange FTX in 2022.
The halving event, occurring approximately every four years, cuts the reward for mining new Bitcoin blocks in half. Meanwhile, mining difficulty adjusts about every two weeks based on the computational power of the network, ensuring that new blocks are added to the blockchain roughly every 10 minutes.
Why Bitcoin Mining Difficulty is Falling
The recent drop in difficulty reflects a decline in mining activity. This could be due to several factors, such as increasing energy costs, decreasing profitability, and miners’ migration. With global energy prices on the rise, mining can become a costly endeavor. Also, some miners may be moving their resources to other cryptocurrencies, as a result of the reduction in incentives following the recent halving event.
However, the lower difficulty should make it easier for existing miners to discover new blocks. This could incentivize some miners to return to the Bitcoin network, potentially bringing the hashrate back up. According to an earlier report from TheCoinRise, the Bitcoin network recently processed its one billionth transaction since its inception 15 years ago.
Bitcoin Mining Profitability Slightly Rebound
Notably, the month of June saw a slight recovery from the early effect of the halving, which had a huge impact in May.
In terms of production, US-listed mining businesses boosted the amount of new Bitcoins in June, accounting for 20.8% of the overall network, up from 19.1% in May. Marathon Digital led the pack, mining 590 Bitcoin last month despite a 4% drop from May. CleanSpark (CLSK) mined 445 Bitcoins, representing a 7% increase from the previous month.
Moreover, Marathon’s installed hashrate remains the highest among US-listed miners, at 31.5 exahashes per second (EH/s). Riot Platform (RIOT) follows with a hashrate of 22EH/s.
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