According to Hashrate Index, hashprice (a measure of mining revenue) fell to an all-time low of $36/PH/day on Thursday afternoon. This means Bitcoin miners now earn fewer dollars per unit of hashrate than ever, a direct result of rising difficulty, stagnant fees, and a 30% price decline. – link
OUR TAKE: Would you be surprised if I told you that despite this, profit margins for some miners are probably higher than the previous hashprice low?
That’s because mining rigs have become much, much more efficient.
Let’s take a look at the prior hashprice all time low, back on August 4, 2024 ($38/PH/day).
At the time, Bitmain’s S21 series was the most powerful and efficient miner yet, but plenty of miners were still running S19 series models like the S19 XP and S19k Pro.
Assuming no change in power cost year over year (our model uses $0.045/kWh), here’s how the margins looked in 2024: The S21 (newest model at the time) had just shipped out and was making $7.68 per day and netting $3.9 after power costs, while S19 XP was churning out $3.27 per day netting $2.14, and the S19k Pro earned $2.98 daily and $1.63 net.
Now, compare the S21 today, which is netting $3.46/day, to the S21 XP, which is bringing in $9.77/day with $5.68 of that going straight to the bank.
So right now, hashprice is 5% lower now than the prior low, but the most efficient air-cooled ASIC (the S21 XP) has a 58% profit margin, whereas the S21 on August 4, 2024 (the most efficient then) had a margin of 51%. And the S21 itself right now, which many public miners used to refresh their fleet from the S19 series, has a 48% margin currently, while S19 models that were popular during the last low were netting only 40% and 35%.
When Bitmain’s new baby the Antminer S23 hits racks starting next quarter, margins will improve even more significantly. Data: Hashrate Index
This is no surprise though. Chip efficiency increases have always carried miner profitability cycle-to-cycle.
Of course, this doesn’t account for the overall profitability of a mine and other operating costs – we have to consider SG&A, financing costs, etc.
Stepping back, we do expect hashprice to trend down. On a long timeline hashrate should grow and miners should ruthlessly compete for efficiency, so the revenue per unit of hashrate should trade in backwardation.
Even if we expect it, it’s still a bummer when hashprice breaches new lows.
