Based on the Hashrate Index data, Bitcoin (BTC) miners had a difficult Q3 as mining expenses rose even if the price of Bitcoin (BTC) kept declining.
The pace at which public miners traded their extracted Bitcoin (BTC) decreased, per the report, and something like this has not been seen since May 2022.
The hash price is the best indicator of how unsuccessful the quarter was. Ever since the beginning of 2022, this measure of the revenue miners generate per hash power has been falling rapidly.
When the price of the flagship cryptocurrency once more dipped under $20,000, the hash price of the cryptocurrency kept declining. Hash price decreased in Q3, falling 5% to $83.30/PH/day as a result of the increasing mining difficulty from $79.60/PH/day.
There is a significant change as evidenced by the decline in the average USD hash price in the period between the end of the second quarter and the beginning of the third. The average USD hash rate for Q2 was $141.20/PH/day. By Q3, it had reduced to $92.70/PH/day. In Q3, the hash price dropped 73% annually from $290.40/PH/day to $79.60/TH/day.
The spike in power rates across the United States contributed to miners’ struggles to turn a profit. Between July 2021 and July 2022, the average manufacturing electricity bill climbed by 25%.
Many mining states, including Tennessee, Texas, Kentucky, Pennsylvania, New York, and Georgia drastically raised their electricity prices. The biggest increase was in Georgia, where power costs increased from around $80 to $120 per megawatt in July of last year. However, North Dakota’s power rates somewhat fell during that time.
Due to all of these factors, it is now expensive to generate Bitcoin (BTC) in most locations in the United States, with an approximate price of $15,000 worth of production costs.
Hosting contracts are now generally $0.08–0.09/kWh more costly as a result of higher manufacturing costs. Considering that hosting agreements often offer power pricing of $0.05–$0.06/kWh in the past, this is a large increase. In addition, a lot of hosting companies choose profit- and revenue-sharing arrangements over the formerly common all-in strategy.
Miners are struggling, particularly as a result of mounting debt obligations and a lack of available liquidity alternatives.
It is hardly shocking that miners are selling their Bitcoin (BTC) holdings. Miners liquidated a sizable chunk of their Bitcoin (BTC) output over the third quarter. However, in August and September, public miners sold less output than they produced on a monthly basis.