Bitcoin’s fall from its all-time excessive to a low of $15,700 has been one of the crucial dominating narratives this yr. Bitcoin misplaced 75% of its worth since Nov. 10, 2020, and over 65% because the starting of the yr.
Nonetheless, a way more exceptional story than Bitcoin’s volatility is the divergence between its worth and its hash price.
Regardless of shedding three-quarters of its worth in a yr, Bitcoin’s hash price reached its all-time excessive of 271.8 EH/s. This divergence between the hash price and the worth is a singular incidence that hasn’t occurred in any of the earlier bear markets.
The skyrocketing hash price turns into a fair greater outlier when evaluating it to miner revenues. WM beforehand analyzed miner income and located that income proceed to lower even for the biggest and most effective mining operations.
WM’s evaluation of two well-liked Bitmain miners paints a bleak image of the mining business. Wanting on the Antminer S9 and Antminer S17 reveals that machines are fighting profitability.
Launched in 2017, the Antminer S9 remained worthwhile all through years of market volatility. Nonetheless, as the worldwide hash price started to increase in 2020, the S9 noticed its profitability fall till it lastly turned unprofitable in Could 2022, when virtually all machines had been faraway from the community.
With an all-in-sustaining price of round $0.05/kWh, Bitcoin’s worth would wish to surpass $19,000 for the Antminer S9 to change into worthwhile once more.
The Antminer S17 remains to be worthwhile. Launched in 2019 as a extra highly effective iteration of the S9, the S17 produced a most hash price of 56 TH/s. Bitcoin’s present worth and rising hash price put the profitability of the S17 at simply $36 per day. This slim revenue has been reducing virtually each day and is predicted to drop even additional within the coming weeks.
The S17 has been fighting profitability all year long. The Terra collapse in June 2022 made the S17 unprofitable for the primary time ever, as Bitcoin dropped effectively beneath $16,000 wiping out billions from the market.
The continued market volatility, mixed with the ever-expanding hash price, is at the moment placing the profitability of the S17 into query. Wanting on the profitability chart for the S17 reveals that the machine is experiencing a pattern much like the S9.
Barely breaking even, the S17 would change into unprofitable if Bitcoin had been to fall underneath $15,500. Crossing the $15,500 may push miners to unplug hundreds of S17s.