Bitcoin miners struggle as energy prices rise and hash prices fall • TechCrunch | Whuff News

Bitcoin prices have they continued to hold close to $20,000 this past week, but some miners are collapsing as prices spiking power and historically low hash rates cut into profits.

Although the price of bitcoin has been falling for a long time and has fallen about 56% year to date, the dominoes started to fall for bitcoin miners. What drives the implosion?

“There are many different issues at play. Obviously a global recession is coming, on top of inflation and rising electricity prices,” Christopher Perceptions, founder of PerceptForm and CEO of NoCodeClarity (no-code web3 apps), told TechCrunch.

“Miners are struggling for a lot of reasons right now,” Nick Hansen, CEO of crypto-mining firm Luxor, told TechCrunch. “We’re seeing a historically low hash rate, which means miners’ profits are at an all-time low.”

Hash price is a metric to determine the market price for each unit of hashing power, which is determined by changes in bitcoin mining difficulty (currently high) and the value of the cryptocurrency.

A screenshot of the bitcoin hashprice index chart which has fallen to almost all time lows

Image Credits: Hashrate index

The hash rate is close to a historic low, according to data from the Hashrate Index, Luxor’s bitcoin mining data analytics. The current hash price is around $70.72, down 80.5% from $361.82 on the same day last year.

In addition, energy prices have risen across many markets, meaning miners’ costs are at an all-time high, Hansen said.

At a higher level, the higher the hash rate, the greater the difficulty in mining bitcoin – meaning it takes more electricity to do so, Perceptions said. “If the price of electricity is high, it becomes difficult to make a profit.”

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