Record Hashrates Squeeze Bitcoin Mining Profits

As Bitcoin mining becomes more challenging, miners face reduced profitability despite high trading values.

The network’s hashrate surged to 635 exahashes per second (EH/s) – at the time of writing it retraced to 594.43 EH/s) – increasing the competition and decreasing individual earnings. Although Bitcoin trades around $65,300, miners are not seeing significant gains due to the increased computing power required, which has tripled since November 2021.

This rise in hashrate has led to the lowest “hash price” in five years, now at $51.13 per terahash per second (TH/s), diminishing profitability for miners.

Industry experts are concerned about the future of Bitcoin mining. Kurt Wuckert Jr., CEO of Bitcoin SV mining pool Gorilla Pool, highlighted that profitability for miners is at a nearly six-year low.

He warned against investing in blockchain assets or mining equipment due to market uncertainties, emphasizing the role of electricity consumption and power arbitrage in mining profitability.

The centralization of mining power also raises concerns. Foundry and Antpool control 54% of all Bitcoin blocks mined in the past year, leading to questions about the network’s decentralization. This concentration of power among a few entities compromises Bitcoin’s distributed nature, posing potential security and governance risks.

Miners now navigate a competitive landscape with record-high hashrates and declining hash prices, squeezing profitability and making the future of Bitcoin mining uncertain.