“Content”, — write: www.coindesk.com
Miners’ biggest challenge is revenue. The reward they receive for confirming blocks on the Bitcoin blockchain was cut 50% in April, when their combined market cap was about $20 billion. In this current epoch, only 450 bitcoin are mined a day and fees paid to miners remain at cycle lows, just 10 BTC ($946,000) on Nov. 27 according to Glassnode data.
BTC Fees (Glassnode)
That means they either have to diversify revenue streams or produce bitcoin at a cheaper cost than the spot price, currently about $96,000.
That’s a challenge that is about to become more difficult. The mining difficulty, which measures how hard it is to produce the blockchain’s blocks, is expected to increase by a further 3% at some point in the next few days.
Mining difficulty, already firmly above 1 trillion, automatically adjusts every 2016 blocks or roughly every two weeks. The higher the difficulty, the harder — and costlier — for miners to produce a new block.
The heart of the issue is the soaring hashrate, which has held above 700 exahash per second (EH/s) for more than a month. The hashrate is the computational power required to mine and process transactions on a proof-of-work blockchain like Bitcoin.
On a seven-day moving average, the hashrate is currently at 726 EH/s, continuing to put in higher highs and higher lows since mid-year, according to Glassnode data.
Hashrate (Glassnode)
In 2024, many miners have diversified their revenue streams by pivoting into the AI and high-performance computing (HPC) industries, where there is soaring demand for locations that can host the computing power they need.
One example is IREN (IREN), whose shares surged 30% on Wednesday on renewed AI interest.
Other, such as MARA Holdings (MARA), are leveraging their bitcoin stashes and bumping up their bitcoin balance sheet holdings. As of Nov. 27, MARA added a further 703 BTC after selling a 0% $1 billion convertible note to raise the funds. The company now owns a total 34,794 BTC.
The CoinShares Valkyrie Bitcoin Miners ETF is a proxy for publicly traded miners. Its share price is up 60% year-to-date, which is underperforming bitcoin’s 113%.
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