19 Sep 2022

Bitcoin mining profitability falls to 2020 levels

The profitability of bitcoin mining has fallen to 2020 levels due to the lethal combination of the declining bitcoin price and surging mining difficulty.
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The rough times continue for the bitcoin miners, as their daily revenues plummeted by 10% over the past seven days. Miners are now scraping together $17.9 million per day. This is among the lowest since November 2020, before the start of the previous bull market. To put that into perspective, miners earned $62 million per day at the peak in November 2021.The cause of the plummeting miner revenues is, first and foremost, the falling bitcoin price. In addition, the difficulty sits at an all-time high after undergoing four consecutive upwards adjustments. This has led to a slowdown in the block production rate from 6.28 blocks per hour to 5.9.
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Source: Bytetree
The falling mining revenues mean miners with higher energy prices will be squeezed out of the market. The break-even energy price of running the energy-efficient Antminer S19j Pro is currently 0.09 per kWh. This break-even price is far below the current energy spot prices in most densely populated regions, meaning mining is only profitable in areas with stranded or underutilized energy sources.Other than that, we see a 36% surge in the daily transaction volume, primarily caused by the 39% increase in the average transaction value, reaching $19.8k.The active addresses increased significantly as the merge approached but have retracted as the markets have calmed down following the event.
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