Arcane Research: Bitcoin mining profitability falls to 2020 levels

Bitcoin mining cash flow fell 80% from its November 2021 peak to levels last seen two years ago, according to Arcane Research analysts.

Why are the #bitcoin miners forced to sell their precious bitcoin?

Their cash flows are plummeting. The Antminer S19 only makes $13k per BTC — an 80% decline from the November peak (power price of $40 per MWh). https://t.co/BxVMUP4MVR pic.twitter.com/PHG4HSXhPC

— Jaran Mellerud (@JMellerud) June 22, 2022

Experts noted that the latest-generation Antminer S19 ASIC miner yields about $13,000 per BTC mined at $40 per MWh. The older Antminer S9, at the current price of the cryptocurrency, is unprofitable.

Public mining companies largely have access to cheaper energy tariffs. Moreover, their equipment fleet consists of highly efficient devices, analysts noted.

Nevertheless, in May miners sold 100% of the Bitcoin mined during the month. Since the start of the year, they have sold between 25% and 40% of the mined cryptocurrency.

According to Arcane Research, pressure on mining profitability, in addition to the price decline, was driven by the rise in Bitcoin hashrate and, correspondingly, the difficulty. Computing power increased amid significant investments in new equipment.

On June 11, the hashrate (7-day smoothed moving average) reached a maximum, approaching 231 EH/s, according to Glassnode. By June 21, the metric had fallen sharply to 207 EH/s.

A 10% fall in network hashrate in a matter of days could have been caused by the shutdown of unprofitable devices.

In May, miners’ revenue from the first cryptocurrency fell by 22% from April’s level, to $906 million.

Analysts at Arcane Research warned of a further decline in Bitcoin’s price to $10,350.

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