Bitcoin

April

James

Bitcoin’s hash rate saw a decline as Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) mining firms have started turning off unprofitable mining rigs after the <a href="https://cointelegraph.com/news/bitcoin-halving-2024">fourth Bitcoin halving</a>.
The Bitcoin network’s hash rate fell to a two-month low of 575 exahash per second (EH/s) on May 10 before making a small recovery to the current 586 EH/s, according to data from <a href="https://www.blockchain.com/explorer/charts/hash-rate" target="_blank" rel="noopener nofollow">Blockchain.com</a>.
The hash rate drop can be attributed to the fact that “miners are beginning to turn off unprofitable rigs,” according to a May 13 X <a href="https://twitter.com/jbutterfill/status/1789945648382345327" target="_blank" rel="noopener nofollow">post</a> by James Butterfill, head of research at CoinShares. 
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-05/c5e6a27d-4430-4ce7-850f-d0da077da571.png" alt="" title="">
 <figcaption style="text-align: center;">
 Bitcoin hash rate since June 2023. Source: Blockchain.com
 </figcaption>
</figure>
The temporary drop was predicted by an April 19 report by CoinShares, which expects the hash rate to surge next year. According to the report:
<blockquote data-ct-non-breakable="true">
 “Our model forecasts the hash rate rising to 700 exahash by 2025, although after the halving, it could fall by up to 10% as miners turn off unprofitable ASICs.”
</blockquote>
The temporary reduction is attributed to the increased costs of Bitcoin&nbsp;mining due to the halving, along with rising electricity costs, according to the report:
<blockquote data-ct-non-breakable="true">
 “Key mitigation strategies include optimizing energy costs, increasing mining efficiency, and securing favorable hardware procurement terms.”
</blockquote>
<h2 data-ct-non-breakable="true" id="infrastructure-and-energy-costs-remain-key-for-btc-mining-profitability">Infrastructure and energy costs remain key for BTC mining profitability</h2>
Yet, according to Nazar Khan, co-founder and chief operating officer of TeraWulf, only smaller mining operations with less energy-efficient equipment will be endangered after the 2024 halving. In an interview with Cointelegraph, Khan said:
<blockquote data-ct-non-breakable="true">
 “If you are a firm that just owns a bunch of machines and you are not profitable, you will be challenged. If you are a company that owns quality infrastructure that can deliver low-cost power, that’s a real asset, and if anything, the underlying value of that asset [BTC] has increased…”
</blockquote>
TeraWulf is the world’s eighth-largest Bitcoin mining company, worth over $670 million, according to <a href="https://companiesmarketcap.com/bitcoin-mining/largest-bitcoin-mining-companies-by-marketcap/" target="_blank" rel="noopener nofollow">Companiesmarketcap</a>. Despite the halving of block rewards, it&nbsp;plans expand its mining operations this year.
Related: <a href="https://cointelegraph.com/news/bitcoin-mining-profitability-wont-fall-halving">10 days until halving: Bitcoin mining profitability won’t necessarily fall</a>
However, the profitability of mining operations largely depends on the cost of electricity the companies are paying. The S19 XP and M50S++, two of the older ASIC models, operate at a loss with electricity costs above $0.0 per kilowatt-hour, according to a May 2 X post by <a href="https://twitter.com/hashrateindex/status/1786086008972320967" target="_blank" rel="noopener nofollow">Hashrate Index</a>.
<blockquote data-ct-non-breakable="true">
 “S19 XP &amp; M50S++ will operate at a loss if the hash cost rises &gt;$0.09/kWh. &gt;$0.08/kWh k Pros &amp; M50S+ will be unprofitable. And at $0.06-$0.07/kWh the S19j Pro+, j Pros, and M30S++ will struggle.”
</blockquote>
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-05/7a6740b4-db02-45a7-9f2d-f7577d0faeaa.jpeg" alt="" title="">
 <figcaption style="text-align: center;">
 ASIC profit/loss per hash cost. Source: Hashrate Index
 </figcaption>
</figure>
Related: <a href="https://cointelegraph.com/news/runes-offering-lifeline-bitcoin-miners-terawulf">Runes are offering a significant lifeline for Bitcoin miners — TeraWulf COO</a>

Bitcoin hash rate dips as miners turn off unprofitable ASICs post-halving

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