{"id":245839,"date":"2022-06-29T18:00:41","date_gmt":"2022-06-29T17:00:41","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=245839"},"modified":"2022-06-29T19:58:16","modified_gmt":"2022-06-29T18:58:16","slug":"bitcoin-miners-are-facing-harsher-conditions-despite-easier-mining-difficulty-coin-metrics-says","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/bitcoin-miners-are-facing-harsher-conditions-despite-easier-mining-difficulty-coin-metrics-says\/","title":{"rendered":"Bitcoin miners are facing harsher conditions despite easier mining difficulty"},"content":{"rendered":"

Despite the decline in mining difficulty, Bitcoin (BTC<\/a>) miners are facing harsher conditions<\/a> in the market due to the rising costs of energy and hardware, Coin Metrics'\u00a0special State of the Network<\/span><\/a> reveals.<\/p>\n

Coin Metrics said that the BTC mining hash rate has been stable despite the price decline.<\/p>\n

Hash rate is the computational power required to create new blocks on the Bitcoin network and mine new ones. Since peaking at 220 EH\/s in May, the 30-day moving average has dropped to around 215 EH\/s.<\/p>\n

Mining difficulty is down<\/h2>\n

Mining difficulty, another critical metric, has significantly declined. Mining difficulty changes every two weeks to ensure that the interval between each block remains 10 minutes.<\/p>\n

Difficulty directly affects profitability as it determines the average time between each block. It recently fell by 2.3%, the second-largest decline this year.<\/p>\n

Energy cost is affecting miners<\/h2>\n

While the mining difficulty is down, the energy cost for Bitcoin mining has increased significantly.<\/p>\n

The global energy crunch, inflation, and supply chain issues place miners in an unfavorable situation where they pay more for less energy, resulting in lower revenue.<\/p>\n

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Source: Coin Metrics<\/figcaption><\/figure>\n

Per the report, out of the top ten states by hash rates in the US, only Texas and Nebraska have seen a reduction in their industrial electric rate. Oklahoma and Georgia rates have increased by more than 20% yearly.<\/p>\n

But not all miners feel this increase as some have built relationships with their energy providers, which allows them to hedge against the rise.<\/p>\n

Bitcoin miners' sell-off can keep price down<\/h2>\n

All these issues have pushed many miners to sell their Bitcoin holdings<\/a>, a move JP Morgan says<\/a> will only keep the price of the asset low.<\/p>\n

According to strategists at the bank, miners accounted for 20% of all reported BTC sales in May and June. If this continues, it will weigh on the price of Bitcoin during the third quarter.<\/p>\n

Which miner will survive this crypto winter?<\/h2>\n

According to an analysis<\/a> by Arcane analyst Jaran Mellerud, many miners will find it difficult to survive the current market situation.<\/p>\n

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Which public #bitcoin<\/a> miners will be the winners and losers of the bear market?<\/p>\n

I analyzed their cash flows and balance sheets to find out.<\/p>\n

A thread\ud83e\uddf5<\/p>\n

— Jaran Mellerud (@JMellerud) June 27, 2022<\/a><\/p><\/blockquote>\n