Bitcoin Miners See Profitability Boost as Hashprice Reaches New Highs with Rising BTC Price and Fees
Bitcoin miners are experiencing an uptick in profitability as Hashprice, a key metric tracking mining returns, hits its highest levels in a month. The increase is primarily driven by rising Bitcoin (BTC) prices and higher transaction fees, providing miners with some much-needed relief.
Hashprice, developed by Luxor, measures the expected daily income from 1 TH/s of hashing power, estimating miners’ earnings relative to their contribution to the network’s computational power. Glassnode reports that hashprice is currently sitting above $62 PH/s, the highest it has been since mid-December.
The surge in hashprice is largely attributed to Bitcoin’s recent price surge above $100,000, marking a 56% increase over the past three months, and the increase in miner fees. Current daily fees are hovering around 12 BTC, the highest level in more than a month, driven by the growing inscription activity on the network.
Following the April 2024 halving, when Bitcoin mining rewards were cut by half, hashprice fell from approximately $115 PH/s, creating a challenging environment for miners. For much of 2024, miners’ revenue remained below the 365-day simple moving average (SMA). However, by November, mining revenues have surpassed the SMA, signaling a positive shift in market conditions.
Although hashrate has reached new all-time highs, resulting in an increase in network difficulty, making it harder for miners to secure rewards, the rise in Bitcoin’s price and transaction fees has provided a cushion for profitability.
Andre Dragosch, European Head of Research at Bitwise, told CoinDesk that miners are in a more favorable position than last year.
“We’ve seen a slight dip in the network’s hashrate since its peak in early January, but Bitcoin’s price rise and the increase in transaction volumes have contributed to the recovery in hashprice,” Dragosch noted. “This recovery should encourage miners to continue expanding their hashrates.”
Additionally, Dragosch pointed out that Bitcoin miners appear well-capitalized, as reflected by the ongoing increase in miner holdings. This suggests that miners are selling less Bitcoin than they are mining on a daily basis, indicating a strategy of accumulation and confidence in future price appreciation.
With Bitcoin’s price showing strength and transaction fees helping to support mining profits, miners are positioned for sustained profitability and growth in the coming months.
