The hash rate that measures the computing power of the Bitcoin network grew 2% compared to last month. The statistics linked to BTC mining indicate a complex moment for this activity. The Bitcoin (BTC) mining industry is going through a complex period, with profitability falling for the third consecutive month in September, according to a report from the US bank JP Morgan. This is largely due to a 9% increase in difficulty bitcoin mining in relation to August 2024negatively affecting miners' profits. Additionally, in September the hash rate (which measures the computational power to process a block successfully) grew by 2% compared to the previous monthwhich underlines the economic difficulties facing the sector. According to JPMorgan analysts, in September bitcoin miners earned an average of $42,000 per EH/s (exahashes per second) in daily revenue for block rewards, which represents a 6% decrease compared to August. These figures represented a gross margin of 38.4%, meaning that, after covering direct costs, miners made that percentage of their income as profit. This level, according to analysts, was “the lowest recorded recently.” Furthermore, the fees miners earn for processing transactions on the Bitcoin network represented less than 5% of the total reward miners receive for each block mined. On the other hand, the JP Morgan report noted an improvement in bitcoin's annualized volatility. This metric was 44% in Septemberwhich represents a decrease compared to the 62% recorded in August.
2024 remains a complex year for Bitcoin mining
Using the information provided by the Braiins platform, it can be confirmed that 2024 has been a difficult year for bitcoin miners. The following graph shows the increase in the difficulty of successfully processing a block and the hash rate that, combined with the volatility of the bitcoin price, can lead to a decrease in the profitability of mining.
The image shows three lines representing the price of bitcoin (in purple), hash rate (in orange), and mining difficulty (in light blue) from 2010 to the present.
Increasing difficulty and hashrate of the Bitcoin network hurt miners' income. Source: Brains. The light blue line shows a steady increase in mining difficulty. As the difficulty increases, more computing power is required to mine bitcoin, which increases operating costs for miners.
For its part, the constant rise in the hash rate is expressed by the orange line, indicating that more miners are participating in the network, which also contributes to the increase in competition to mine the next block and obtain the reward. However, the increase in difficulty and hash rate also They have a positive impact on the security of the bitcoin network. A higher hashrate indicates that there are more miners and more computing power working on the network, making it more difficult and expensive for an attacker to obtain 51% of the network's total computing power. Ultimately, the purple line on the chart shows the volatility of the bitcoin price. Although there have been significant spikes, the price does not always follow a constant increase. In periods where the Bitcoin price does not increase at the same rate as the difficulty and rate of hashthe profitability of mining decreases.
This is because miners' operating costs rise while their income, in the form of mining rewards and due to the effects of bitcoin price action, does not rise at the same rate. A passive and not very volatile bitcoin on the rise reduces the profitability of mining. In this way, the report prepared by JP Morgan coincides in some points with the examination made by BitcoinDynamic about this challenging situation that concerns miners.