Why Are Bitcoin Mining Rigs In A Downward Spiral
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Data shows the prices of Bitcoin mining rigs have been going down for a while now as profitability for miners has been observing a shrink.
Cost Of Bitcoin Mining Rigs Has Been On A Downward Spiral Recently
As per the latest weekly report from Arcane Research, BTC mining rigs are now at their lowest cost since August of last year.
To understand why this trend may be occurring, it’s best to take a look at the “Bitcoin mining hashrate” indicator first.
This metric is a measure of the mining power for a rig. The value of the hashrate tells us how many hashes can the machine perform in one second on the network.
The total BTC hashrate is, therefore, a measure of the total computing power connected to the BTC blockchain network.
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The cost of a mining rig is measured in terms of the price per TH/s (terahashes per second). The below chart shows how the price has changed over the past year:
Looks like the price per TH/s for the under 38w/TH rigs has dropped off in recent months | Source: Arcane Research's The Weekly Update - Week 15, 2022
The above graph has curves for two different categories of Bitcoin mining rigs, one of them consumes below 38w/TH while the other has a wattage of more than 68w/TH.
It seems like the below 38w/TH machines have observed a significant downtrend over the past few months, taking their price to the lowest it has been since August of last year.
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A major reason behind the cost of mining rigs going down would be the low profitability of miners at the moment.
The total Bitcoin hashrate has stagnated near ATH values for a while now, which has resulted in immense competition between miners.
This, combined with the fact that the BTC price has been struggling lately, has lead to extremely tight margins for miners as the mining profitability has fallen to a one-year low.
BTC Price
At the time of writing, Bitcoin’s price floats around $42k, up 6% in the last seven days. Over the past month, the crypto has lost 1% in value.
The below chart shows the trend in the price of the coin over the last five days.
The price of BTC looks to have surged up over the last couple of days | Source: BTCUSD on TradingView
A few days back, Bitcoin suffered another plummet that took the crypto below the $39k level for the first time in more than a month. But, it looks like the price has now recovered a bit as the coin breaks above $42k again.
Featured image from Pixabay.com, charts from TradingView.com, Arcane Research
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