Bitcoin miners report declining production as profitability shrinks

One of the largest crypto mining companies in the United States, Hut 8, has reported a sharp decline in own production for April, according to a company announcement on May 6.

The company reported a 36% drop in BTC mined in April compared to March. However, this was mainly due to the relocation of over 25,000 mining machines from sites in Nebraska and Texas, which were acquired by Marathon Digital Holdings.

Hut 8 produced 148 BTC in April compared to 231 BTC in March as its deployed hash rate fell from 5.4 EH/s (exahashes per second) to 4.5 EH/s.

“In the context of the halving, our team’s operational capabilities allowed us to maximize the hash rate deployed as we completed the relocation of our fleet from hosted facilities to our own and put new online capacity,” said Hut 8 CEO Asher Genoot.

Decrease in mining production

Hut 8 was not the only major Bitcoin mining company to report reduced production. Other public miners such as Bitfarms, Cipher, CleanSpark, Core Scientific, Riot, and Terawulf also reported output declines of between 6% and 12% in April, according to industry outlet The Miner Mag.

The April 20 halving event halved the block reward to 3,125 BTC, which also halved mining output to around 450 BTC per day from 900.

However, the BTC fee market briefly negated the impact of the halving when Bitcoin Runes were released, increasing demand for block space. However, as the latest mode of meme assets loses popularity, BTC production rates are expected to continue to decline and miner selling may increase.

Application creation #Bitcoin has significantly changed the income streams of miners.

Transaction fees now account for more than 7% of its total revenue, up from 1% two years ago.

This trend has persisted over the past four weeks and could strengthen the network’s fundamentals. pic.twitter.com/YVbdmLXB5c

— Ki Young Ju (@ki_young_ju) May 7, 2024

On May 6, Riot Blockchain reported their April production updates. The company had a 12% decline in BTC production in April, with 375 BTC produced compared to 425 in March.

However, Riot expects its total self-hash mining capacity to reach 31 EH/sa by the end of 2024, more than double its current capacity.

Fall in profitability

Production reductions have coincided with a drop in profitability or “hash price.” The current hash price is only $0.05 per terahash per second per day, according to the Hash Rate Index.

It has fallen 72% from a peak around the time of the halving to $0.182/TH/s/day and is down 87.5% from 2021 highs of around $0.400/TH /s/day.

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