The researchers at BitOoda have noted in a recent update that this past Friday’s Bitcoin (BTC) network difficulty reset “took the target Hashrate (or amount of computing power securing the network) to 111 EH/s, up ~7% over the prior epoch.”
BitOoda, a global digital asset financial technology & services platform providing next-gen risk management solutions, best-execution brokerage & expert market analysis, has pointed out in its weekly report that the observed BTC network Hashrate continues to recover, and is presently at 134 EH/s (as of August, 16, 2021).
As mentioned in the report, the rapid recovery may be attributed to Chinese miners “finding sites to deploy their rigs and ongoing expansion by other miners.” According to BitOoda’s findings, this reinforces “upside risk” to their previous Hashrate estimates, although the “long lead times” on the power infrastructure suggest it “should still take ~10 quarters for network Hashrate to converge back to our original forecasts — with better miner economics in the interim.”
The report also mentioned that Bitcoin “gained 6.6% week-on-week (WoW), settling at $47,074 as of midnight UTC on 8/15. Price increases have allowed strong margins to sustain.”
The report further noted that the total BTC earnings per PH/s “are ~8.15 mBTC, down from ~8.76 mBTC / PH/s last week on decreased Transaction (Tx) fees (1mBTC or milliBTC = 1/1000 BTC).” Meanwhile, transaction or Tx fees fell by 17 bps WoW “to 0.8% of miner rewards, or 0.05 BTC per block, with low congestion in the ‘Mempool’.”
The report added that Bitcoin mining revenue declined “to $384 / PH/s per day and $419/MWh following last week’s difficulty reset, decreasing BTC / PH/s rewards.” The Bitcoin network Hashrate appears to be “steadily approaching prior highs, but could see stagnation as the slack in plug-in ready sites gets fully absorbed,” the report revealed.
The BitOoda North American Hash Spread™ was pretty much flat “at $387.” As mentioned in previous updates, the Bitcoin network has “mostly normalized from recent events, and we expect Hashrate to slowly recover to track our previous estimates.”
The report confirmed that they “define the BitOoda Hash Spread™ as the difference between the cost of power per MWh and the Bitcoin mining revenue per MWh.” This allows cryptocurrency miners to get a “quick sense of the surplus generated by their business to cover personnel, overhead, depreciation, and profit.”
The report from BitOoda added that the weighted average “around the clock U.S. wholesale industrial power price (5 markets) of $31.05 / MWh leads to an aggregate spread of $387.”
Older-generation S9-class devices “saw their Hash Spread™ up ~2% to $87/MWh. S17-class devices, the bulk of the installed base, saw a hash spread of about $275/ MWh,” the report noted while adding that the current observed Hashrate of >140EH/s “implies ~2.2mm operating machines, drawing ~5.3GW power, although the spike in Hashrate observed yesterday may be influenced by luck.”
As stated in the report, the 112 MWh “required to mine 1 BTC with S19-class rigs translates into $3,492 in power expense” and it “costs $12,413 using S9 rigs, a ~74% margin, excluding labor.”
Bitcoin mining is currently profitable “well above $100/MWh power price, even with older gen S9 class rigs,” the report confirmed.
The main takeaways from the report are as follows:
- Observed Hashrate is “significantly higher than the target reset on Friday — if this is not a luck-based outlier, target Hashrate could increase by >15–20% at the next difficulty reset”
- Miners continue to “face infrastructure bottlenecks, which should lead to 2+ years of better mining economics relative to our prior estimates”
- Mining economics “remain strong right now, but could weaken with network growth”
- We assess this “presents an opportunity for US-based miners to gain share and acquire capacity and new hosting customers at attractive terms”