BTC prices are not the only thing in decline at the moment. Following recent record highs, the Bitcoin hash rate is also decreasing sharply.
The Bitcoin hash rate has declined by around 14% since its all-time high earlier this month. The current hash rate is 234 EH/s (exahashes per second), according to Blockchain.com. Furthermore, there has been a sharp slump in the metric since Nov. 22, with 11% lost in a week.
According to industry outlet Hashrateindex, a supply shock of miners and lenders dumping machines could put significant downward pressure on the ASIC market.
Lower demand for new hardware will likely impact the prices of new and used machines.
Bitcoin Hash Rate Hardware Impacted
Timing is everything when it comes to profitable Bitcoin mining. Markets are cyclical, and bear markets and hash rate slumps are common to crypto. ASIC (application-specific integrated circuit) miner prices have fallen by around 80% since November this year.
The current hash price (also known as profitability) is at a record low of just $0.058. Hash price is measured in dollars per day per terahash per second ($/d/TH/s). It has fallen by 84% since the same time last year.
At such low levels, the average daily revenue from an Antminer S19j Pro (104 TH/s) is just $6. It may even run at a loss in areas where electricity prices have surged. That particular unit can be found listed on retail websites for between $2,000 and $2,500.
The falling profitability has vastly increased the payback period for ASIC miners. Currently, the payback period is around 27 months on average, up from around 12 months this time last year.
A looming Bitcoin halving in 2024 is also likely to impact mining profitability as block rewards a halved.
With all of these factors working against Bitcoin miners, hardware prices are set to tumble over the next year or two. However, miners will again power up their rigs after the hash rate and difficulty value fall to where profits can be made.
BTC Miner Capitulation
The hash rate slump has resulted in a death cross on a long-term technical indicator. The hash ribbon, which measures hash rate moving averages, has just flipped into capitulation territory.
The last time this happened was in June following the Terra Luna contagion crypto market crash.
BTC prices are up 1.8% on the day at $16,461 at the time of press, according to CoinGecko. However, they are at a two-year low, and more selling pressure from miners could see Bitcoin drop even further in the months ahead.
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