Total BTC Mining Revenue Has Fallen to A Two-Year Low
The 2022 Bitcoin price drop has put severe pressure
on Bitcoin miners. And this has led to the constant selling of their BTC holdings.
As per the latest report, Bitcoin mining revenue has decreased to its lowest level in almost two years due to a variety of reasons. The high energy consumption has resulted in rising energy costs which in result reducing miner profitability. At the same time, big players continue to invest in high-end equipment to fulfill hashrate requirements.
Citing data from the hash price index, Bloomberg reports that the mining revenue worth per unit of processing power has decreased to 7.7 cents for each terahash, the lowest in two years since September 2020.
The last time mining revenue fell this low was in June 2022. At that time, miners were forced to sell coins to cover operational costs. The hash price index takes into account several elements, including BTC price and transaction fees to compute total revenue.
The difficulty of mining Bitcoin is currently at an all-time high as major companies continue to invest heavily in mining infrastructure.
Jarand Mellerud, mining analyst at digital asset analysis firm Arcane Crypto, stated that with all costs considered only miners with exceptionally low energy rates are now profitable.
Soaring Energy Costs
Soaring energy costs are one of the primary reasons that miner profitability has been tossed into the wind. Bitcoin is currently trading above $20,000 per coin. The last time this happened, energy costs were fairly low in comparison.
According to Luxor CEO Nick Hansen, the last time we reached this level energy prices were much lower across the board. Depending on where you live, your energy prices are at least 30% higher, and in some instances, nearly double.
The Russian invasion of Ukraine and the subsequent Western sanctions altered the energy market dynamics. Europe is experiencing high energy demand and a supply shortage as a result of a severe heat wave.
Read also: Crypto Regulator Explains How Celsius Manipulated Price of CEL Token
