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). This metric has been in steady decline since July, when it surged above $62 per PH/s. The 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 impacting 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 drop in Bitcoin’s price following the October market crash.
Mining hardware manufacturers, such as Bitdeer, have responded by turning to self-mining to offset the shortfall in demand for mining machines. Meanwhile, the razor-thin profit margins, high capital expenditure on hardware upgrades, and rising energy costs have caused many Bitcoin miners to pivot toward AI and high-performance computing data centers as alternative revenue sources, since Bitcoin mining continues to grow increasingly competitive.
**Miners Pivot to AI Amid Increasing Hashrate**
Bitcoin miners face a guaranteed reduction in rewards by 50% every four years during the Bitcoin halving events, even as the computational power and electricity needed to mine blocks continue to climb. Back in 2009, the initial block reward for successfully mining a block was 50 BTC, and miners were able to mine using 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 Bitcoin profitably.
These challenging economics have pushed many miners to diversify into adjacent AI data center and compute businesses. This pivot has generated billions of dollars in revenue for companies that have made the switch.
For example, in October, Cipher Mining signed 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, inked a deal with Microsoft in November to provide GPU computing services, valued at $9.7 billion.
As Bitcoin mining becomes more competitive and less profitable for smaller operators, this strategic shift toward AI and high-performance computing offers miners a promising path forward in an evolving market.
https://bitcoinethereumnews.com/bitcoin/hashprice-near-critical-level-bitcoin-miners-feel-the-squeeze-report/
