Bitcoin Miners' Power in the USA to Decline This Summer

Bitcoin Miners' Power in the USA to Decline This Summer

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Bitcoin Miners' Power in the USA to Decline This Summer: What It Means for Profitability

The Impact of Heat on Bitcoin Mining Operations


 

 

The power of Bitcoin miners in the USA is set to decrease this summer due to the intense heat. This seasonal change is driving American miners to reduce energy-intensive cryptocurrency mining operations. According to CoinDesk, citing analysts from Blockware Intelligence, the Bitcoin network's hash rate (the combined processing power of miners' equipment) and mining difficulty may soon decrease further due to extreme heat in the USA.

 

  • Seasonal Trends and Their Effects

 

Traditionally, during the summer months, the Bitcoin network's hash rate either falls or stabilizes. This seasonal trend has been observed for the second consecutive year due to existing electricity consumption restrictions in hot weather. A decrease in hash rate directly impacts mining profitability. When the difficulty of mining new Bitcoin blocks decreases, miners can earn more coins for the same computational effort. Since the halving event in April, there has been a steady trend toward lower Bitcoin mining difficulty. Bitcoin's hash rate has dropped by approximately 57 EH/s (around 8%) since May.

 

  •  Statistics and Economic Indicators

 

Data from the American mining company Luxor indicates that the average weekly hash rate reached 600.52 EH/s. Before the halving, this figure was 654 EH/s, after which it temporarily dropped to 590 EH/s. The key profitability indicator for Bitcoin mining, the Bitcoin Hashprice Index, was $52 as of June 19. This indicator means that a Bitcoin miner using 1 petahash per second (PH/s) of computational power can earn about $52 per day.

 

  •  Public Mining Companies' Market Share

 

Despite the hash rate decline, public mining companies in the USA have been increasing their market share for the second month in a row. In June, the 14 largest American companies increased their share to 23.8% of the total network hash rate. Analysts from JPMorgan attribute this growth to the exit of inefficient private miners from the market.

 

  • Post-Halving Hash Rate Trends

 

After the halving event halved the rewards for mining a Bitcoin block, the network's hash rate continued to grow for some time, reaching a record 658 exahash per second (EH/s) on May 25. This led to a reduction in profits in an already crowded sector. The primary reasons for the hash rate increase include the deployment of new cryptocurrency mining equipment.

 

  • Operational Challenges and Cooling Costs

 

"The main operational challenge for mining farms is reducing heat generation," stated analysts from Blockware Intelligence. "ASICs are large, powerful computers that can reach very high temperatures without proper cooling measures." Increased temperatures lead to equipment overheating, requiring companies to spend more on cooling.

 

  • Increased Residential Energy Demand

 

The situation is exacerbated by the growing demand for electricity from residential consumers who are heavily using air conditioners. This, in turn, leads to a redistribution of electricity away from miners, forcing them to reduce operations. "Many cryptocurrency mining companies are forced to partially shut down during the summer months due to equipment overheating and increased residential electricity consumption," commented experts from Blockware Intelligence.

 

  • Potential Future Adjustments

 

These challenges faced by miners during the summer period could lead to a temporary decrease in the Bitcoin network's hash rate and other cryptocurrencies. "If the hash rate continues to fall, a Bitcoin mining difficulty adjustment is expected this week," said Colin Harper, Head of Content and Research at Luxor Hashrate Index. "This could work in the miners' favor," Harper added.

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