The hash price of Bitcoin (BTC) has fallen significantly in recent weeks, falling to its levels since early January — a potential sign that the mining boom may be over.
Hashprice measures the market value for each unit of hashing power. The price of BTC determines the value of Hashprice along with network difficulty and transaction fees.
With BTC’s network bottlenecks rising to new all-time highs and the asset’s value falling to a two-month low, miners may face tough times as the hash price fell to $61.38/PH/day, according to the index of hashrate data.
What does this mean for miners?
Hashrate Index researcher Jaran Mellerud said Bitcoin mining difficulty and hashrate jumped over 20% in 2023 as the digital asset improved its price performance.
He noted that the introduction of BTC stimulated many marginal operators to turn on their machines, which increased market competition.
However, the leading digital asset of crash below $20,000 wiped out half of the profits it made in 2023. This means miners face a Situation as in 2022 where the falling value of BTC made mining unprofitable.
Mellerud stressed that BTC’s hashrate is likely to increase as more miners turn on their machines in the coming months. Several miners have already revealed intentions to increase their mining capacity by bringing more rigs online.
Mellerud added:
“If the hashprice is to remain at the current level, Bitcoin the price should rise significantly… The recent development of hashprice shows the importance of hedging income.”
Miners face a 30% crypto mining tax
The situation for US-based BTC miners could be complicated by the proposed 30% taxation of all energy costs associated with cryptocurrency mining.
US President Joe Biden’s 2024 Budget plan included a new tax proposal on crypto mining. The government said that crypto mining activities require colossal energy consumption and can harm the environment. He added that mining activities could raise electricity prices and cause uncertainty around local power companies.
The CEO of the Satoshi Act Fund, Dennis Porter, described the proposal as “unfair and targeted discrimination”. He added that taxation would “effectively kill Bitcoin extraction in the US.
Public stock tank for miners
After the series of events, the shares of several Bitcoin miners fell in the last 24 hours.
According to Google Finance data, Riot shares are down 12.22% to $5.53, while shares of Hut 8 fell 14% to $1.75. Marathon Digital and Canaan also saw their shares drop by 11% and 7%, respectively.
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