BTC price isn’t the only thing down at the moment. After the recent all-time high, the bitcoin hash rate is also declining rapidly.
The bitcoin hash rate is down about 14% from its all-time high earlier this month. According to Blockchain.com, the current hash rate is 234 EH/s (exahash per second). Furthermore, the metric has seen a sharp decline since November 22, down 11% in one week.
According to industry outlet Hashtrendindex, a short supply of dumping machines from miners and lenders could put significant pressure on the ASIC market.
Lower demand for new hardware will affect the prices of new and used machines.
bitcoin hash rate hardware affected
Timing is everything when it comes to profitable bitcoin mining. Markets are cyclical, and bear markets and hash rate declines are common for crypto. ASIC (application-specific integrated circuit) miner prices have dropped by nearly 80% since November this year.
The current hashrate (also known as profitability) is at an all-time low of just $0.058. Hash value is measured in dollars per terahash ($/d/TH/s) per day. It has declined by 84% since the same time last year.
At such a low level, the average daily revenue from Antminer S19j Pro (104 TH/s) is only $6. It may also run at a loss in areas where electricity prices have gone up. That particular unit can be found listed on retail websites for between $2,000 and $2,500.
Falling profitability has significantly increased the payback period for ASIC miners. Currently, the payback period is around 27 months on an average, up from around 12 months last year.
An impending bitcoin halving in 2024 is also likely to affect mining profitability as block rewards are halved.
With all these factors working against bitcoin miners, hardware prices are only going to drop over the next year or two. However, after a drop in the hash rate and difficulty price where profits can be made, miners will turn on their rigs again.
btc miner capitulation
The decline in hash rate has resulted in a death cross on long-term technical indicators. The Hash Ribbon, which measures the hash rate moving average, has just flipped into the capitulation region.
The last time this happened was in June after the Terra Luna contagion crypto market crash.
According to CoinGecko, the price of BTC is up 1.8% to $16,461 at press time. However, they are at a two-year low, and more selling pressure from miners could see bitcoin fall further in the coming months.
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