Most bitcoin miners are currently facing significant challenges, as the leading cryptocurrency continues to decline in value. According to a recent analyst note from Rosenblatt, bitcoin is trading at $64,143, marking a 26% drop year-to-date. Earlier reports indicate that the cryptocurrency briefly dipped below $63,000, approaching a two-week low.
As the price of bitcoin tumbles, the revenue generated from mining activities has dwindled, with current earnings dropping below 3 cents per terahash—the threshold for profitability for most operations. Chris Brendler, an analyst at Rosenblatt, highlighted the grim situation in a note to clients, emphasizing that only the most efficient mining operations are managing to stay afloat.
The process of crypto mining—which involves verifying digital transactions on a computer network—has become exceedingly burdensome as the bitcoin hash price, a measure of revenue per terahash, has also suffered. Recent data from Hashrate Index indicates that the hash price has plummeted about 30% in the past three months, paralleling the asset’s decline. It currently hovers around $28 per terahash per second per day.
Brendler remarked on the deteriorating economics of bitcoin mining, suggesting that previously low hash prices, which already prompted a reassessment of earnings forecasts, now seem incredibly favorable in contrast to current levels. Consequently, a number of mining firms are experiencing worsening financial conditions. For instance, Bitmine Immersion Technologies has seen a significant 29% decline this year, while other companies, like MARA Holdings and CleanSpark, have recorded drops of 13% and remain approximately flat, respectively.
In light of these challenges, some miners are pivoting toward alternative ventures to mitigate their losses. High-performance computing (HPC) services are becoming an appealing option for several companies. Miners such as Cipher Mining and TeraWulf are adjusting their business models to focus on HPC systems for high-speed data processing and complex calculations. The demand from hyperscalers has prompted Brendler to suggest that all miners should consider transitioning from bitcoin mining to HPC, if feasible.
Interestingly, while the broader bitcoin market suffers, Rosenblatt’s cap-weighted bitcoin mining index is down only 2% year-to-date. This relative stability is attributed to miners’ proactive shift toward HPC, which is assisting them in counteracting the financial strain from digital asset mining.
