Bitcoin’s Profit Crunch: Hash Price Hits Record Low Post-Halving—What’s Next For Miners?
30 April 2024 - 12:00PM
NEWSBTC
In Bitcoin mining, the activity’s profitability is significantly
influenced by a metric known as the ‘hash price.’ This metric has
recently plummeted to unprecedented levels, causing concerns within
the mining community. Bitcoin’s Latest Halving Sends Hash Price
Into Freefall As Bitcoin underwent its fourth halving event on
April 20, expectations were high regarding a potential increase in
miner revenue. However, contrary to these expectations, the hash
price witnessed a steep decline, currently valued at less than $50
per PH/s per day. The concept of hash price, developed by Luxor, a
Bitcoin mining services company, helps understand the daily dollar
earnings a miner can expect per unit of hashing power. Related
Reading: Expert Makes Bold Call: It’s Time To Swap Your Dollars For
Bitcoin Despite Bitcoin’s hash rate remaining strong, the halving
event, which reduced the mining reward from 6.25 BTC to 3.125 BTC
per block, has exerted downward pressure on the critical
profitability metric. This reduction in potential earnings comes
when the overall cryptocurrency market, including Bitcoin, is
experiencing volatility. This downturn in hash price is not
isolated but coincides with other declining metrics in BTC.
According to TradingView, Bitcoin’s dominance index has also
reduced, highlighting a decrease in capitalization relative to the
total crypto market. Bitcoin’s dominance has declined from 57.10%
mid-month to approximately 54.69% today. Concurrently, Bitcoin’s
market value has also trended downward; over the past week, the
cryptocurrency experienced a decrease of about 4.4%. This downward
trend persisted into the past day, with Bitcoin’s price dropping an
additional 0.8%. Signs Of A Bullish Future Amid Bitcoin Current
Slump Despite the downward turns, analysts like those from
CryptoQuant suggest that bullish signals might still be on the
horizon. They point to the Adjusted Spent Output Profit Ratio
(aSOPR), which, despite current market indecisiveness, continues to
exhibit bullish trends. Moreover, expert analysts like Rekt Capital
have weighed in with a long-term perspective, suggesting that
Bitcoin could see a significant rally as part of this halving
cycle, drawing parallels with previous cycles. Historical data
shows that Bitcoin typically reaches a market peak within 500-550
days post-halving. If these patterns hold, Bitcoin could be poised
for substantial gains by mid to late 2025, reinforcing the cyclical
nature of this leading digital asset’s market movements. Related
Reading: Bitcoin Long-Term Outlook: Analyst Foresees Peak In Late
2025 Overall, while the immediate effects of the halving on hash
price and market dynamics paint a sad picture, the underlying data
indicates a mix of caution and optimism. Featured image from
Unsplash, Chart from TradingView
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