Following the historic gains observed on the day of Bitcoin's halving, miners are now grappling with a new reality: a combination of elevated network hashrate and reduced revenue is putting pressure on profits. Data from crypto analytics firm CryptoQuant reveals that the average income per hash performed, known as the hash price, has plummeted to its lowest level since October 2023. Hash prices dropped from nearly $0.12 in early April to $0.07 post-halving, peaking at $0.19 on the day of the halving event.
The Bitcoin halving event, which slashed miners' block rewards from 6.25 BTC to 3.125 BTC, has contributed to the decline in revenue. Despite this reduction, the industry's operating costs have remained relatively stable. CEO of CryptoQuant, Ki Young Ju, estimates that the cost of mining with an Antminer S19 XP will double from $40,000 to $80,000 following the halving. However, despite the decreased rewards, the total network hash rate has remained steady since the halving, suggesting that Bitcoin mining remains profitable at the current price level, which has remained above $64,000 since April 19.
While it is still early to assess the long-term implications of the halving on the network's hashrate, initial observations indicate that miners are continuing to operate at a similar pace as before the halving. The total network hashrate has held steady at 617 EH/s following the event, as reported by CryptoQuant. On the day of the halving, transaction fees surged to record levels relative to miners' total revenue, accounting for 75% of total revenue, approximately $80 million. However, since then, transaction fees' share of total revenue has declined to around 35%.
Despite the apparent stability in the immediate aftermath of the halving, the long-term impact on hashrate and overall miner activity remains uncertain. Historically, post-halving periods have witnessed miners exiting the market due to the heightened operating costs. Various factors, including fluctuations in Bitcoin prices and changes in electricity costs, are poised to influence the trajectory of mining operations moving forward.
