Bitcoin Mining Profitability Metric Reaches All-Time Low After 4th Halving
As the Bitcoin (BTC) network moves forward following its fourth halving, a key metric that provides insight into the profitability of BTC mining has fallen to an all-time low. The hash price created by Luxor dropped to $57.09 on Friday, April 26. These echo levels were last seen following the FTX crash led by Sam Bankman-Fried.
Bitcoin Hash Price Drops Unprecedentedly
This sharp drop in hash price came right after the last Bitcoin Halving, which took place on April 20. The event, which occurs approximately every four years, resulted in the reward given to miners being halved, thus reducing incentives for the security of the network. Therefore, as miners face decreasing rewards, the hashprice metric serves as a vital indicator of their potential earnings.
Expressed in various currencies but usually displayed in USD or BTC (sats), Hashprice measures the expected value of 1 TH/s of hashing power per day. It also serves as a barometer of a miner’s potential income based on network difficulty, Bitcoin price, block subsidy, and transaction fees. Specifically, Luxor’s Bitcoin Hashprice Index uses a 144-lag Simple Moving Average (SMA) to account for transaction fees and provides a comprehensive view of mining profitability.
Additionally, the hash price is intricately linked to fluctuations in Bitcoin’s price and transaction fee volume, but moves inversely with changes in Bitcoin’s mining difficulty. As a result, the recent drop in hash price signals challenging times ahead for miners, who are now facing rising operational costs and diminishing revenue streams.
Also Read: Bitcoin Price Is Preparing for a Long-Term Bull Market: Here’s Why
How Can BTC Miners Stay Profitable?
While the crypto landscape remains highly volatile, the current decline in the hash price underscores the increasing difficulties within the Bitcoin mining community. Miners are tasked with adapting their strategies during this period of uncertainty. X crypto analyst Doctor Profit recently pointed out these challenges immediately following the completion of the Bitcoin Halving event.
In a post on He added: “In other words, $80,000 is needed for miners to remain profitable at the current halving rate. “We have a period of ascension ahead of us, only very few people understand it.”
Bitcoin mining companies or individual miners could remain profitable once the BTC price reaches $80,000. However, Bitcoin price is currently struggling with the recent bearish trend, falling below $64,000. However, analysts are optimistic that Bitcoin will rise above $80,000 and even $100,000.
Also Read: 96,000 BTC Options Expiry Sets Maximum Pain Price at $61,000, What’s Next?
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