While Bitcoin’s price recovers from another setback, the network hashrate surged, breaking through the 700 EH/s level. The bearish price action has driven hashprice back to all-time lows. Will September once again be the worst-performing month, as it has been in most previous years? If mining margins don’t improve soon, ASIC manufacturers and resellers may be forced to lower hardware prices even further. In this week’s mining economics rundown, we’ll cover the following topics:
Bitcoin Price Keeps On Struggling
Average Monthly Returns Indicates Redtember
Record Outflow Streak US Bitcoin ETF’s
Network Hashrate Breaking 700 EH/s
Difficulty Ready to Take Out ATH
Hashprice At Record Lows
NiceHash Sees 63% Surge in Profitability
ASIC Hardware Payback Period: S21 Series Too Expensive?
If you’re finding this article helpful, don’t miss out on our comprehensive guide, ‘Mastering Bitcoin Mining.’ This in-depth 50-page handbook covers everything you need to know to launch and scale your mining operation. We explore all cooling systems, essential components of mining infrastructure, containerized solutions, ASIC machines, firmware, monitoring software, and much more.
Bitcoin Price Keeps On Struggling
Although the price didn’t dip as low as it did on August 5th, when BTC briefly fell below $50K, on September 6th, we saw the lowest candle close since February 26th. Since the all-time high on March 14th, the market has been in a choppy downtrend. Bitcoin has rebounded after last week’s low of $52,000, but it remains below the 200-day moving average, a key level closely monitored by traders. For the bulls to regain confidence, the 200 SMA (currently around $64K) is the level to watch.
Average Monthly Returns Indicates Redtember
Looking at the average monthly returns since 2013, September appears to be the worst-performing month of the year. ‘Redtember’ averages -5.04% over the past 11 years. Whether 2024 will follow this trend remains to be seen, with three weeks still left. If history repeats itself, September could end in the red, but we are heading into ‘Uptober’ next month.
Also noteworthy are the final quarters of previous halving years, 2016 and 2020, which saw significant green price action each month. This offers plenty of hopium for the remaining months of 2024.
Record Outflow Streak US Bitcoin ETF’s
One of the reasons for the recent poor price action has been the longest outflow streak from the U.S. Bitcoin ETF since its launch in January. The ETF has seen eight consecutive days of outflows.
Network Hashrate Breaking 700 EH/s
The network hashrate has once again surged into uncharted territory, setting a new all-time high and breaking through the 700 EH/s mark. This growth is largely driven by the deployment of next-generation ASIC Bitcoin miners like the Bitmain Antminer S21 series and the MicroBT Whatsminer M60 series. Additionally, with the end of summer in the Northern Hemisphere, cooling temperatures are reducing the need for curtailment due to demand response. The lower risk of overheating hashboards also means fewer miners will need to switch their fleets into low-power mode.
Difficulty Ready to Take Out ATH
After reaching a peak of 90.67T, the network difficulty dropped by 4.18% on August 14th, followed by a 2.99% increase on August 28th. Later today (September 10th), difficulty is expected to rise by another 4.7%, pushing it to new record highs once again.
Hashprice At Record Lows
The weak price action pushed hashprice back to the historic low of $38/PH/Day. With network hashrate spiking and a difficulty increase coming up, hashprice will mark new record lows.
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NiceHash Sees 63% Surge in Profitability
At the start of the week, miners selling their hashrate on the NiceHash marketplace benefited from a significant payrate surge. Due to high demand, the payrate jumped from 0.0007194 BTC/PH/Day to 0.0011197 BTC/PH/Day in just one day. This spike reflects a hashprice of nearly $62/PH/Day, compared to the $38/PH/Day at the time—a massive 63% increase. Although the payrate has since decreased, it remains at 0.0007629 BTC/PH/Day, still 7.2% higher than the regular hashvalue of 0.000711 BTC/PH/Day.
ASIC Hardware Payback Period: S21 Series Too Expensive?
Poor market conditions are driving ASIC hardware prices to historic lows. The Antminer S19j Pro is now selling for less than $6/TH in the U.S., compared to $120/TH just three years ago—a staggering 95% price decline. However, the break-even operational expenses (electricity plus other operational expenses) for the S19j Pro is currently below $0.055/kWh, forcing many miners to upgrade to the latest generation.
One of the newest machines on the market is the S21 Pro, offering 234 TH/s. These air-cooled units are available wholesale at around $20/TH. Despite these low prices, record-low margins mean the payback period still exceeds 3 years for the majority of miners. If hashprice doesn’t rebound soon, manufacturers may be forced to lower prices for these newest machines even further. This would mean a reduction in the premium which is currently paid for the latest generation ASIC miners.
If you’re finding this article helpful, don’t miss out on our comprehensive guide, ‘Mastering Bitcoin Mining.’ This in-depth 50-page handbook covers everything you need to know to launch and scale your mining operation. We explore all cooling systems, essential components of mining infrastructure, containerized solutions, ASIC machines, firmware, monitoring software, and much more.
