Data shows the cash flow of Bitcoin miners has halved since the price all-time high set in early November of last year.
Bitcoin Miner Cash Flow Halves As Hashrate Makes New ATH And Price Declines
As per the latest weekly report from Arcane Research, the cash flow for BTC miners seems to have halved since November 2021.
The “miner cash flow” here refers to the difference between the price of Bitcoin and the electricity cost of mining 1 BTC. Therefore, the indicator tells us a measure of the BTC mining profitability.
Now, here is a chart that shows the trend in the value of this indicator for two of the most popular mining rigs, the S9 and the S19:
Looks like the miner cash flow has trended downwards since early November of last year | Source: The Arcane Research Weekly Update - Week 6
As you can see in the above graph, the Bitcoin miner cash flow has fallen off for both the machines since the November ATH.
S9’s cash flow has decreased by 60%, while the more efficient S19 took a slightly lesser hit of 41%. There are mainly two reasons behind this trend.
The first is the reduction in the crypto’s price. As miners earn their rewards in BTC, the value of the crypto going down also means that mining revenues go down as well.
The other factor is an uptrend in the Bitcoin hashrate. This indicator is a measure of the total computing power connected to the network.
When the value of the indicator goes up, it means more BTC mining rigs are coming online, and hence the competition among miners is going up. This leads to lesser revenue for each individual miner.
The mining hashrate has been riding on an upwards trajectory since a while now, and is currently at ATH levels. During the bull run, increasing values of the metric didn’t affect miner profits much as the price of the coin going up more than made up for the reduction due to increased competition.
The report suggests that the hashrate is expected to continue its growth in the coming months, and therefore if the price of BTC also doesn’t go up in tandem, the miner cash flow will keep on going down in the near future.
At the time of writing, Bitcoins price floats around $43.6k, down 1% in the past week. The below chart shows the trend in the price of the coin over the last five days.
BTC's price seems to have dipped down a bit over the last few hours | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research