Why Bitcoin Miner Revenues Are The Biggest Bear Market Loser

Data shows the Bitcoin miner revenues have plunged down by around 81% since the October peak, here’s why.

Bitcoin Miner Revenues Have Lost Big During Bear Market

According to the latest weekly report from Arcane Research, the BTC miners’ hashprice is now just down to $0.077 per TH/s.

The relevant indicator here is the “hashrate,” which is a measure of the total amount of computing power connected to the Bitcoin network.

The metric’s value is calculated in TH/s (terahash per second), signifying the rate at which miners can perform new hashes on the blockchain.

The daily revenues that these chain validators make per TH/s of their hashrate is called the “hashprice.” Here is a chart that shows the trend in this indicator over the past couple of years:

Looks like the value of the metric has been going down over the last year | Source: Arcane Research's The Weekly Update - Week 39, 2022

As you can see in the above graph, the Bitcoin mining hashprice has observed a steep decline over the past twelve months.

The indicator’s value has come down from $0.422 during the peak in October, to just $0.077 today. This makes it a decline of 81% in this period.

For comparison, the BTC price has gone down by 60-70% in this same timespan, a huge drawdown, but still better off than the miners’ revenues.

There are mainly two reasons why the Bitcoin mining hashprice has suffered so hard in this bear market.

The First and the more obvious one is the declining price of the crypto. Since miners pay off all their running costs like electricity bills in fiat, the USD value of their revenues is more relevant to them, which is why the hashprice is also in dollars.

Bitcoin’s value going down hard during the bear market has naturally meant the hashprice has also taken a big hit.

The other reason is the ever-increasing hashrate. A feature of the BTC network is the “mining difficulty,” which tries to make sure that no matter how many miners or how much power comes online on the chain, blocks will still only be hashed at a constant rate.

This means that whenever the hashrate goes up, the network counters it by upping the mining difficulty. While there is more TH/s connected to the chain, the total revenues still remain the same, implying that the revenue per TH/s actually goes down.

BTC Price

At the time of writing, Bitcoin’s price floats around $19.8k, up 4% in the past week.

The BTC value seems to have risen over the last two days | Source: BTCUSD on TradingView Featured image from Brian Wangenheim on Unsplash.com, charts from TradingView.com, Arcane Research