Bitcoin miners, the backbone of the world's leading cryptocurrency network, are dealing with a notable drop in profits due to falling bitcoin prices and reduced network activity. Over the past three days, these specialized computing operators have experienced an 8.4% decline in their earnings, reflecting the downward trend in bitcoin's value.
The main reason behind this reduction in profits is the drop in hashprice. This metric shows how much money each unit of computing power dedicated to mining bitcoin can make. Just three days ago, on June 14, miners were making a good $57.36 for every petahash per second (PH/s) of hashing power they used. But today, the hashprice has fallen to $52.53, which means a decrease in profitability by 8.4%.
This decline in mining profits can be directly linked to the recent dip in bitcoin prices. On June 12, just two days prior, bitcoin was trading at a robust $69,000 per coin. However, as of today, the cryptocurrency's value has fallen to $65,539, exerting downward pressure on the hashprice and, consequently, on the earnings of miners.
The effect of reduced profits is clear in how much computing power the Bitcoin network has, called the hashrate. Before the prices fell, the network's hashrate briefly went past 600 exahashes per second (EH/s), which is impressive. But after profits dropped on June 14, the hashrate went back below this level.
According to data from various sources, the seven-day moving average for the hashrate currently stands at 594 EH/s, while the more volatile three-day moving average is approximately 590 EH/s. Despite this drop in computing power, the network's block intervals – the time it takes to confirm a batch of transactions – remain steady at around nine minutes and 40 seconds.
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Given the current block times, the upcoming difficulty adjustment, scheduled for June 20, is expected to result in only a modest 0.1% increase in mining difficulty. This represents a minor reprieve for miners, who experienced a 0.79% decrease in difficulty during the last adjustment, following a 1.48% increase in the previous cycle.
However, the combination of reduced block rewards from the recent bitcoin halving event and lower bitcoin prices has created a challenging environment for miners. Last week, Julio Moreno, the head of research at cryptoquant.com, noted an unusual trend of miners selling off their bitcoin reserves, potentially in an effort to maintain liquidity and sustain operations.
As the market changes, it's important for bitcoin miners to stay strong. Their ability to handle less profit and keep their computers running well is key for keeping Bitcoin secure and working smoothly.
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