Bitcoin’s mining sector is under mounting pressure as the hash price, the industry’s key profitability metric, slips toward levels that could force smaller operators offline and strain the wider supply chain.
Hash price, which measures expected daily revenue per unit of computational power, is currently around $42 per petahash per second (PH/s). The metric has been in steady decline since July, when it surged above $62 per PH/s. This push toward the $40 level is leading Bitcoin mining operations, already facing razor-thin profit margins, to consider shutting down their rigs, according to TheMinerMag.
The decline in hash price is also affecting the mining supply chain. Hardware providers are filling fewer orders for struggling miners and are taking a hit on any BTC-denominated sales due to the price drop following the October market crash.
Mining hardware manufacturers, such as Bitdeer, have turned to self-mining to offset the shortfall in demand for mining machines.
Razor-thin profit margins, high capital expenditure on upgrading hardware, and rising energy costs have caused many Bitcoin miners to pivot toward AI and high-performance computing data centers to generate revenue as Bitcoin mining becomes increasingly competitive.
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### Miners Pivot to AI Amid Constantly Increasing Hashrate
Bitcoin miners face guaranteed reward halving every four years, which cuts their rewards by 50%. Meanwhile, the computational power and electricity required to mine blocks continue to climb. When Bitcoin launched in 2009, the initial block reward was 50 BTC, and miners used CPUs on personal computers.
Following the April 2024 halving, the BTC block reward decreased to 3.125 BTC. Today, specialized mining hardware known as application-specific integrated circuits (ASICs) is required to mine BTC efficiently.
These challenging economics have forced many miners to diversify into adjacent AI data center and compute businesses. This pivot has generated billions of dollars in revenue for companies that made the switch.
In October, Cipher Mining inked a $5.5 billion deal with tech giant Amazon to provide compute power to Amazon Web Services over a 15-year period. Similarly, IREN, a Bitcoin mining company, signed a deal with Microsoft in November to provide GPU computing services, valued at $9.7 billion.
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As Bitcoin mining becomes more competitive and profit margins remain tight, the shift toward AI and high-performance computing appears to be a promising new revenue stream for the sector.
https://bitcoinethereumnews.com/bitcoin/hashprice-near-critical-level-bitcoin-miners-feel-the-squeeze-report-2/
