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(Kitco News) – Despite the recent bout of sideways price action that has the top crypto languishing near support at $26,000, the Bitcoin (BTC) network continues to grow stronger by the day as the network recently hit a new all-time high hash rate amid rising institutional interest in cryptocurrency mining.
According to data from Blockchain.com, the hash rate of the Bitcoin network hit a high above 414 exahashes per second (EH/s) on Aug. 17, marking a new peak for the metric.
Bitcoin’s hash rate has steadily been climbing since the midway point through the 2021 crypto market rally, increasing more than 4.8x since that time when the network registered 84.8 EH/s.
Bitcoin network hashrate. Source: Blockchain.com
The network’s difficulty gauge also hit a new all-time high as the difficulty rate is designed to automatically fluctuate depending on miner activity to ensure that the Bitcoin block time remains consistent at 10 minutes.
Bitcoin network difficulty. Source: Blockchain.com
On August 22, Bitcoin mining difficulty increased by 6.17% to hit an all-time high of 55.62 trillion hashes.
While these statistics bode well for the Bitcoin network, a growing number of mining outfits are finding it increasingly difficult to remain in business as the rising cost to operate equipment is not able to be covered by the stagnant price of BTC.
According to an analysis by Cambridge University and MacroMicro, on August 27, the average cost to mine a single BTC was $45,877 versus the spot price of $26,089, which represents a loss of $19,588 per BTC mined.
Bitcoin average mining costs. Source: MacroMicro
According to HashPriceIndex, revenue is now just $0.060 per terahash per second per day, around half of what it was in early May when the Bitcoin Ordinals inscription frenzy caused a heavy demand for block space.
Data provided by CompaniesMarketCap shows that the 16 Bitcoin mining companies that are publicly traded have racked up a combined $4.47 billion worth of losses over the past 12 months, led by Core Scientific (OTC:CORZQ), Marathon Digital (NASDAQ:MARA), and Riot Blockchain NASDAQ:RIOT).
Top publicly traded Bitcoin mining companies by earnings. Source: CompaniesMarketCap
Of the 16 companies listed, the only one to record positive earnings over the past 12 months is Canaan with $62.33 million in earnings.
According to a report from Bloomberg on Thursday, mining companies have been relying on funds from stock sales to keep them in operation during the ongoing bear market. The 12 major publicly traded miners raised roughly $440 million through stock sales in Q2, “a jump of almost 60% from the previous three months,” Bloomberg said.
And it’s not just retail investors that have been squeezed by the Bitcoin miners’ struggles, as data provided by CNN shows that BlackRock Fund Advisors is one of the largest shareholders in four out of the top five worst-performing mining companies.
BlackRock holds 10.75 million shares of Riot Blockchain (RIOT), or 6.14% of the total supply, 10.94 million shares (6.44%) of Marathon Digital (MARA), 2.2 million shares (0.88%) of Cipher Mining (CIFR), and 4.8 million shares (2.28%) of TeraWulf (WULF). In total, the firm invested $411.54 million in crypto mining companies, which represents 0.35% of the firm’s $114.6 billion in assets under management.
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